PayPal just struck a huge partnership with MasterCard

By September 7, 2016Bitcoin Business

This story was delivered to BI Intelligence " Payments Briefing " subscribers. To learn more and subscribe, please click here . PayPal is entering into a partnership with MasterCard that aims to increase MasterCard usage and boost PayPal’s presence in physical stores, according to a press release. The deal comes on the heels of a similar partnership between PayPal and Visa. Here are the key points from the deal: Benefits to MasterCard MasterCard will clearly be presented as a payments option in the PayPal wallet and MasterCard’s branding will be displayed. PayPal customers will have the option to enable MasterCard as their default payment method within the app. PayPal won’t promote ACH as a payment option to MasterCard cardholders any longer. PayPal will use MasterCard to tokenize MasterCard payment information held in the PayPal app. PayPal’s Braintree will offer MasterPass as a checkout option. Benefits to PayPal PayPal will gain undisclosed financial incentives based on the volume of MasterCard transactions it processes. PayPal will no longer have to pay a digital wallet operator fee for MasterCard transactions made using its services. PayPal wallet will be able to be used at over 5 million contactless merchant locations globally. Benefits to card issuers Card issuers will benefit from transaction level data from MasterCard customers who are using PayPal. MasterCard and PayPal will work together to scout customers who may be willing to move from ACH payments in PayPal to MasterCard payments. This is a good strategic decision for PayPal. Card transactions are more expensive for PayPal to process than ACH transactions; that could hurt PayPal’s profit in the short term. But PayPal is in a precarious position. PayPal has been a top payment method for e-commerce transactions, but Visa Checkout, Stripe and others are creating more competition for those dollars. Additionally, […]

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