First came news in mid-December that PayPal was buying StackMob, a mobile backend service provider. The following week, Amazon quietly acquired Italian mobile payments startup GoPago.

For PayPal, the objective was simple: Beef up its technology stack to help the company more effectively deploy its payment products worldwide. On Amazon’s end, the intent, to no one’s surprise, was further world domination. By integrating GoPago’s point-of-sale technology--though not the rest of its business, which reportedly endured massive layoffs shortly after the news broke--Amazon improved its Doublebeam mobile commerce solution, thereby making it more useful to customers.

With these giants going head-to-head in the mobile payments space, a lot of startups must be wondering where they fit in--and how they’ll survive. But the little guys might not have anything to worry about, says Cherian Abraham, an analyst at Experian. "If the big companies have equity at their disposal, acquisitions and acqui-hires are bound to happen," he says, but the acquisitions aren't always part of a broader strategy that will squeeze out smaller companies.

Abraham says PayPal realized that smaller companies like Braintree and Stripe "were more developer-friendly, and it needed to focus on those things." That being the case, PayPal’s acquisition of San Francisco-based StackMob will do nothing more than make sure its tools and overall framework are driven by a core developer focus, which isn't a threat to startups, he says. "This is something that is a supplementary effort." 

Unfortunately, most mobile payments startups are "either doing interesting things or struggling," says Jordan McKee, another Yankee Group analyst. The winner so far seems to be Square, the Jack Dorsey-helmed startup that processes more than $10 billion annually. 

For seemingly every other intriguing new mobile payment solution that emerges, an acquisition follows. This month, the digital wallet startup Lemon was snapped up by LifeLock, the identity-theft protection service, for $42 million. And eBay, PayPal’s parent company, bought Braintree for $800 million because, as developer relations head John Lunn put it to VentureBeat, "We need to be like them."

For bigger companies, McKee says, the modus operandi has been, "We can either acquire them, replicate [what they do] and do a better job because they’re strapped, or completely avoid it if they don’t have a successful approach." 

To that end, McKee predicts the mobile payments space in 2014 "will be marked by a weeding out of the market." A lot of startups will drop out as they fail to gain traction, while others will be "gobbled up by the bigger ones," he says. "The space right now is very saturated and this level is really just unsustainable, with too many companies fighting for market share."

Denee Carrington, an analyst at Forrester Research, agrees with McKee's assessment, but says the outlook for mobile payment startups isn't so bleak. "Either they think they can scale and be as large as the big guys, they’re hoping to go public, or get acquired," she tells Inc. "But they shouldn’t be afraid, especially if acquisition is a palatable outcome." Carrington foresees banks joining the list of acquirers next year, as they try to improve their mobile offerings.