PayPal will partner with 200 U.S. merchants to start offering coupons for mobile deals in 1Q 2012, according to Daily Deal Media. PayPal, owned by eBay, Inc., plans to enter the daily deals market dominated by Groupon, Inc. and LivingSocial by offering daily coupons tailored to users' buying habits and locations. Since PayPal already has knowledge about customer's purchasing habits, it may have an advantage over other daily deal sites because it can offer more targeted, relevant deals.
Overall, the daily coupons are designed to keep users engaged with eBay beyond the payment process. PayPal will offer a "mobile wallet" so that people can pay from their mobile phones, and the company hopes to expand PayPal's use until it is widely accepted in stores, as a credit card would be.