Can Paypal Compete with Groupon?

Ebay Inc. (NASDAQ:EBAY), parent of PayPal, is aiming to take on coupon heavyweights Groupon (NASDAQ:GRPN) and LivingSocial (NASDAQ:AMZN) in the daily deals business – counting on differential offerings that are customized to the user’s buying profile and cell phone location.

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Expecting to launch these mobile deals in 2012 Q1, in partnership with most of the top 200 U.S. retailers, PayPal hopes to cut a slice in the rapidly growing coupon market, expected to double to $1.47 billion by 2015.

According to PayPal President Scott Thompson, “PayPal can use its knowledge about customers’ preferences to do coupons better than LivingSocial, Google Offers (NASDAQ:GOOG), and Groupon with targeted offers that arrive on users’ smart phones as they’re passing stores”. Further, “The experience is going to be completely different than anyone else’s through and through – we’ll only give you something that we think fits the category of unique and relevant. Everyone else is going to bombard you,” he said in an interview.

This initiative follows up on PayPal’s drive to make itself just as commonplace in stores as credit cards issued by companies such as Visa (NYSE:V).

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