14 DAY TRIAL // PayPal is well on its way to becoming a universally accepted payment method thanks to an agreement announced today with MasterCard after it also signed a similar partnership with Visa earlier this year.
These two deals will simplify the procedures needed to transfer funds from PayPal accounts to Visa and MasterCard-based payment cards, and vice versa.
PayPal will benefit from an increased presence at PoS systems
PayPal, who broke off from eBay last year, has been busy mending relations with Visa and MasterCard in an attempt to secure a spot as a viable method of payment via in-store point-of-sale (PoS) systems.
The new MasterCard partnership announced today and the one with Visa, confirmed this past July, will allow users to pay using funds from their PayPal account while at a store's counter, but using Visa or MasterCard's technologies, supported by most PoS software, to handle the transaction. This will be possible via PayPal Wallet, the company's mobile payments app that supports contactless payments via the user's phone.
On the other hand, PayPal has simplified procedures to link Visa/MasterCard-based cards to PayPal accounts and set them as their preferred method of payment within the PayPal service, the primary source from where funds are pulled when the PayPal account balance reaches zero.
For the past years, PayPal has asked customers to link their PayPal accounts to bank accounts primarily. The Visa and MasterCard agreements will stop pushing users towards banks and allow them to decide if they want to link the PayPal account to a Visa or MasterCard payment card, or the underlying bank account.
MasterCard benefits from an increased presence in PayPal accounts
These two agreements also include Braintree, a mobile payments system that has become PayPal's biggest product. Integrated by services like Facebook, Uber, Airbnb, GitHub, Twilio, Dropbox, Pinterest, OpenTable, StubHub, and Eventbrite, Braintree has become one of the top players in the mobile payments market.
All three companies have something to win from this deal, with PayPal benefiting from presence at PoS systems, while Visa and MasterCard will boost their profits from an increased number of transactions originating from PayPal and Braintree.