Square COO says sights are set on beating PayPal

May 25, 2011, 7:56 PM UTC

From left: TechCrunch's Mike Arrington, Square COO Keith Rabois. Photo: JP Mangalindan/Fortune

FORTUNE — Two days after Square, the mobile payments startup co-founded by Twitter’s Jack Dorsey, announced an iPad app that replaces cash registers and lets customers pay for products with their Android or iOS devices, company COO and super angel Keith Rabois took the stage at TechCrunch Disrupt in New York City to talk shop.

He swatted away talk that near field communications (NFC) technologies, a topic discussed earlier today at the conference, may threaten Square’s growing business. (Currently, the company processes more than $3 million in credit card transactions daily and is on track to process $1 billion in payment volume in a year.)

“[NFC] is an interesting technology, but it’s a technology in search of a value proposition,” said Rabois, who contrasted that with Square, a service he argued is about enabling small merchants without pricey credit card transaction devices to conduct business on-the-fly.

In fact, Rabois is so confident in Square, he said it has a 95%  chance of becoming worth more than eBay’s (EBAY) PayPal one day, a bold statement given PayPal’s revenues last year of $3.4 billion on $92 billion of transactions. He also said the startup has a 50% chance of becoming more culturally relevant.

“We are not limited to just e-commerce,” he said. “We enable real world payments, which is a much bigger market and is more valuable.”

Is this just more evidence of Square’s unparalleled ability to wind up the hype machine? Maybe. But Rabois is in a better position than most to know: an early PayPal hire who was dubbed a member of the so-called “PayPal mafia,” he eventually became Executive Vice President of Business Development, Public Affairs, and Policy. And as a well-respected super angel who poured money into 45 startups last year alone  —  prior investments include LinkedIn (LNKD), YouTube, and Quora — he’s shown a knack for figuring out which products and services will resonate. So if anyone should place bets on Square’s success (Dorsey, aside), it’s him.