A new way to pay is coming and 50 million of us will know about even if we don’t want to!
PayPal has entered an agreement with Discover to allow anyone who has a PayPal account to pay for goods and services at 7 million merchants using a PIN-based card.
In the next few weeks or months, depending on how fast the roll out goes, PayPal will be sending out the plastic to its 50 million account holders. You’ll receive a PIN-protected PayPal card that you can use anywhere Discover is accepted.
What PayPal and Discover are cooking up is the greatest possible threat to the Visa/MasterCard cartel in the last 50 years. PayPal and Discover are aiming to set up a completely separate banking system. It could potentially allow merchants to break the grip of the existing credit card cartel.
If this PayPal/Discover system takes off, it would save money for retailers and ultimately you as a consumer. We’ll see how it plays. The path has been littered with people trying to do this and nobody’s quite found the key yet. There have been a lot of false starts so far with near-field communication and cell phones.
But mark my words, we will have alternatives to just cash or plastic over the next couple of years. Ultimately, you will decide which technology is the next great thing. Not anybody who’s pitching it to you.