PayPal are of course entering a fiercely competitive market with many services jostling for position thanks to massive marketing spending, and they are set to differentiate through using the data they have on consumers to target offers based on purchasing patterns and mobile location information - in other words a real threat to Groupon's infamous "competitive moats".
PayPal president Scott Thompson said of their approach:
"The experience is going to be completely different than anyone else's, through and through. We'll only give you something that we think fits the category of unique and relevant. Everyone else is going to bombard you."Being able to tailor deals will become increasingly competitive in what is estimated to be a USD$4.17bn market - of which Groupon and LivingSocial currently have 73% of US market share - by 2015 and PayPal will work with 200 brands initially for their US launch.