Though observers say it is clear that PayPal Inc. plans to move beyond e-commerce into point of sale transactions, there are still questions surrounding how that transition will happen.

The eBay Inc. unit's announcement last month that its payment system would be integrated into VeriFone Systems Inc.'s mobile point of sale product after Jan. 1 is a sign that the advent of PayPal into face-to-face transactions is certain, said Adil Moussa, an analyst at Aite Group LLC of Boston.

PayPal may one day have its own distinct payment network, though it is unclear how it would be built, Moussa said.

PayPal and VeriFone, both of San Jose, Calif., are working on a reseller program for independent sales organizations, but details are scant. ISOs should be preparing to start selling payment services such as PayPal acceptance, Moussa said.

"This is going to be the way of the future," he said.

The sales pitch should not be difficult for ISOs and their sales agents to pick up, Moussa said. "It will be a matter of talking to merchants and the opportunities for merchants," he said.

Merchants likely will not pass on adding another payment acceptance method because their need for revenue is so great, Moussa said.

"It's very painful for a merchant to turn down a transaction," he said.

As a PayPal competitor, Newtek Business Services Inc. contends PayPal's entry into mobile payments represents an industrywide push to get more merchant customers, according to Barry Sloane, the New York company's chairman.

"It's a race to acquire the customer," Sloane said.

Newtek offers merchants a product called NewtPay. Aimed squarely at PayPal, the service offers lower rates than PayPal. For example, merchants with a NewtPay Pro account pay 2.19% of the sale plus 26 cents, according to Newtek's website. That equates to $1.36 for a $50 transaction. PayPal Pro merchants pay 2.9% plus 30 cents, according to PayPal's website — $1.75 on a $50 purchase.

Newtek also is working on a mobile payment product.

With Newtek's strategy set at undercutting PayPal pricing and targeting acquirers, PayPal has to reveal its long-term growth strategy, Sloane said.

"It will be interesting to figure out where they ultimately position themselves," he said.