Paypal CEO Dan Schulman takes part in the company’s relisting on the Nasdaq in New York This story was delivered to BI Intelligence " Payments Briefing " subscribers. To learn more and subscribe, please click here .
In late July, Visa and PayPal announced a collaborative deal that would push PayPal to better promote Visa cards as an option for PayPal transactions and have PayPal share more information with banks and card networks.
Now, it looks like Mastercard is seeking a similar partnership — the firm is having a “constructive dialogue” with PayPal, according to Mastercard CEO Ajay Banga in the firm’s Q2 2016 earnings call. That’s because Mastercard and its peers feel disrupted by PayPal and its 188 million customers, because it makes it easier for consumers and merchants to bypass card network rails, which ultimately limits card network and banks’ business and revenue.
Mastercard is “actively seeking to expand” its relationship with PayPal, according to Banga. PayPal and Mastercard have a longstanding relationship. The firms have been offering a cobranded card product, called PayPal Extras, for ten years. The card, which is issued by Synchrony Bank, offers customers PayPal buyer protection and Mastercard rewards. The firms announced a multi-year renewal of their contract last week.
But Mastercard believes further collaboration is better for both consumers and merchants. Since 2013, Mastercard has charged a small fee to digital wallets like PayPal, which allow customers to pay via their credit card but don’t provide card networks and issuers purchase data. That data is key to Mastercard, which likely wants to know how consumers are spending as commerce moves online. By deepening its relationship with PayPal, MasterCard can grow its card spend while gaining insights about its consumers, which in turn could build a better, more transparent digital wallet offering for all […]
