Should Visa and MasterCard Be Scared?

Motley Fool analysts Austin Smith and Anand Chokkavelu discuss the teaming up of PayPal and Discover Financial Services. Soon, consumers can use eBay's PayPal wherever Discover is accepted (as long as the merchant wants to do so). This is a business partnership that makes a lot of sense, since it gives PayPal big-time access to bricks-and-mortar locations. Meanwhile, Discover handles about a quarter of the credit card volume of credit's Big Three: MasterCard, Visa, and American Express. Given its smaller size, it can be a bit more daring in its quest for market share. Big Three, be warned.

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Anand Chokkavelu has no positions in the stocks mentioned above. Austin Smith owns shares of eBay. The Motley Fool owns shares of MasterCard and has options on American Express. Motley Fool newsletter services recommend American Express, eBay, and Visa. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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