Person-to-person payments operator PayPal is to issue a co-branded MasterCard debit card to enable customer spending at the point-of-sale and facilitate ATM cash withdrawals direct from PayPal accounts.
The PayPal personal payments system enables individuals and businesses to send and receive money instantly by email and currently claims five million users. Subscribers may draw down funds by transfer to their bank accounts or by writing a personal cheque.
The arrangement with MasterCard will significantly increase the utility of the PayPal network, says the company, as qualifying customers will now be able to spend money from their online accounts at any of the 19 million MasterCard-accepting merchants worldwide. The new debit card will also provide PayPal customers with quick access to funds from half a million MasterCard-supported ATMs worldwide.
"PayPal users send more than $7 million each day to people and businesses all over the country from their online accounts," says Todd Pearson, vice president, financial services for PayPal. "With a PayPal MasterCard debit card, they can now make purchases from their online accounts wherever MasterCard is accepted, and have instant ATM access to their PayPal balance around the globe."
The debit card will be linked to PayPal's Money Market Reserve Fund which provides participants with a rate of return on their outstanding balances, while also making funds available for PayPal transactions.