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PayPal is buying mobile wallet maker Paydiant to take on Apple Pay

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PayPal is about to start competing with Apple Pay in a big way. It's made a deal to purchase Paydiant, the developer behind mobile wallet tech that's inside of apps from Subway, Capital One, and — most notably — the consortium of major retailers known as MCX, which makes CurrentC. That means PayPal will be the backbone to the Apple Pay competitor that some of the biggest retailers, including Walmart, Target, and Sears, are planning to roll out. Recode reports that the acquisition price was in the realm of $280 million.

Paydiant is already working with huge retailers

Paydiant's tech allows merchants to build mobile payments, loyalty cards, and offers into their apps. It's up to each retailer to choose which services they want to offer and how they want those services to work, enabling the features either through NFC or QR codes. The idea is that each retailer can build whatever makes the most sense for their customers, but the reality is that — at least in the case of MCX — they're building what makes the most sense for their businesses: an app that uses mobile payments to try to kill the credit card (and, therefore, its related fees).

Whether consumers like the results or not, retailers want an alternative to Apple Pay (as well as Google Wallet, Samsung Pay, and whenever else comes along next), and that's what Paydiant offers. That makes this acquisition, which is expected to close in late March or April, a big one for PayPal, placing it in a prime position in the mobile payments world and building on its 2013 acquisition of Braintree. PayPal has long had a dominating role in online payments, but it's increasingly been fighting for a role in stores. There's no guarantee that what Paydiant is offering will catch on, but it's clear that retailers want it to.

In a separate announcement, PayPal also said today that it is releasing a new version of its Here card reader. The new version includes support for NFC, which ties in nicely with the work that Paydiant is doing. The Here reader also supports Chip and PIN, and PayPal seems to be hoping that it'll catch on in the US as that tech makes its way to the US.