We have recently and frequently covered Square, the mobile payment solution for small businesses. Square has a simple attachment that plugs into any smartphone and allows for the processing of a credit and debit card. This allows businesses to give quick transactions that can speed of service. Further, because everything is computerized and tagged to a unique user ID, valuable analytics can be generated from transaction like never before. Finally, Square got a big boost when it announces a partnership with Starbucks opening up its user base to millions of consumers. Not surprisingly, competition arose. Competition may be bad for Square but great for merchant small business owners as this will help drive down the costs of mobile transaction capabilities. The completion is from PayPal who just announced that their own service, which is almost exactly like Square, has partnered with Discover, the credit card company. This is much bigger news than the Starbucks deal because it opens up PayPal to millions of locations. AllThingsD continues, “’The whole industry has been looking for a landmark that says that all of this is really happening,” said Don Kingsborough, PayPal’s VP of Retail Services. “This is an important deal for us, because it gets us to over seven million locations pretty seamlessly.”

Groundbreaking deals such as this one are becoming commonplace in the industry, as businesses move quickly to make it possible for consumers to pay with their mobile phone or some other form of digital currency at the cash register. Just two weeks ago, Square made a huge splash after announcing that Starbucks would use the start-up to process all of its credit and debit transactions. Now, one of Square’s biggest rivals is making it clear that it still is in the game. In ranking the two deals, Ken Paterson, VP of Research at Mercator Advisory Group, says he would guess that PayPal’s deal is potentially larger. ”It could bring PayPal to the majority of card-accepting merchants across the country,” he said. “The potential scale involved here is very significant…””