MasterCard Inc said it signed a deal with PayPal Holdings Inc that will allow customers to use PayPal’s payment services in stores.
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The two companies expanded a prior relationship, too, by agreeing to a multi-year extension of the PayPal Business Debit MasterCard program in the USA, which follows a deal to extend the PayPal Extras MasterCard co-branded credit card program.
The company is also offering Mastercard as a payment choice for Braintree payment company’s merchants. PayPal will receive financial volume incentives and will no longer be subject to the digital wallet operator fee, according to a press release.
Shoppers and small businesses will be able to instantly cash out funds held in their PayPal accounts to a Mastercard debit card. The partnership, which follows a similar deal with Visa earlier this year, will make MasterCard a clear payment option within PayPal, increase PayPal’s presence at point-of-sale, and will enable Masterpass (MasterCard’s digital wallet) as a payment option for PayPal’s Braintree merchants. Not based on the news in any given day, the rating may differ from Jim Cramer’s view or that of this articles’s author. PayPal will also share data on any transactions that use the MasterCard mobile tap.
The partnership with MasterCard was first reported by the Wall Street Journal.
“Customer choice and partnership are fundamental principles for PayPal that guide how we operate as a company, giving our customers greater opportunities to more easily manage and move their money online, in app and in-store”, Schulman said. It will also put the company on better footing as PayPal faces competition from Apple Inc.’s Apple Pay and Google parent Alphabet Inc.’s Android Pay.
The road to mobile payments becoming widespread in the USA has been bumpy.
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Acrimony between PayPal and credit card issuers had escalated as PayPal grabbed an increasing number of transactions, and as credit card issuers expanded into PayPal’s turf with their own online payment and digital wallet options. While PayPal will sacrifice the cost advantage of bank account-linked transactions, it has has struggled for years to make the transition from an online payments button to an in-store option. Shares fell as much as 9% after that deal was announced.
