Rivals Visa and PayPal set out on 'new path'

Rivals Visa and PayPal set out on 'new path'

PayPal has agreed to make it easier for customers to pay with their Visa cards in exchange for long-term "fee certainty" from the card scheme.

The two firms, which have long been at odds, say that the US strategic partnership puts them "on a new path" that will benefit consumers, issuers, acquirers and merchants.

Under the deal, Visa cards will be presented as a "clear and equal payment option" and PayPal will stop encouraging Visa cardholders to link to a bank account via ACH, a cheaper option for PayPal.

PayPal is also promising to ensure that data provided to issuers and their cardholders for Visa-funded transactions will be consistent with the information that is received with traditional Visa transactions.

In exchange, PayPal gets economic incentives from Visa for increased volume and "greater long-term Visa fee certainty".

Meanwhile, the pair have agreed to enable Americans to instantly withdraw and move money from their PayPal and Venmo accounts to their bank accounts via their Visa debit cards. PayPal will also join the Visa Digital Enablement Program to expand point-of-sale acceptance.

Dan Schulman, president and CEO, PayPal, says: "This agreement opens new avenues for PayPal to collaborate with Visa, financial institutions, and others in the payments ecosystem to deliver greater value, more choice, and new experiences for our joint customers wherever they transact - online, in-app or in-store."

Charlie Scharf, CEO, Visa, adds: "We are excited to begin a new chapter with PayPal. Our agreement provides a framework for our companies to work together collaboratively."

Visa and PayPal also today both reported quarterly results. 

Comments: (2)

Paul Love
Paul Love - Konsentus - Nottingham 22 July, 2016, 09:151 like 1 like

If you cant beat them ..... cooperate.

This looks like the latest installment in the trend to avoid disintermediation.

Interestign to see what MasterCard would have done in the UK now they own both the card rails and the Direct Debit rails - which would they prefer PayPay to promote?

 

Nick Collin
Nick Collin - Collin Consulting Ltd - London 22 July, 2016, 10:51Be the first to give this comment the thumbs up 0 likes

Yes, it's win-win for MasterCard in the UK now they're buying Vocalink.  They'll make money from both "pull" and "push" payments.

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