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.