PayPal and Visa, in many ways competitors, have entered into a strategic partnership. The partnership puts PayPal and Visa “on a new path,” with the companies working more collaboratively to accelerate the adoption of reliable and convenient digital payments for consumers and merchants.
The arrangement is designed to carry benefits for issuing financial institutions, acquirers, and merchants, the companies say. For issuing institutions, these include a better customer experience, more spending volume on their credit and debit cards, lower operational costs, and improved security. Merchants will also benefit from the improved customer experience, efficiency, and security, which together will help drive increased sales, according to PayPal and Visa.
Some details of the partnership:
- Visa cards will be presented as a clear and equal payment option during enrollment and subsequent payments, with an easy ability for consumers to set as their preferred payment method.
- PayPal will join VDEP, a commercial framework for Visa partners to access Visa’s token services and other digital capabilities in the United States.
- Consumers will be able to instantly withdraw and move money from their PayPal and Venmo accounts to their bank account via their Visa debit cards leveraging Visa Direct.
- PayPal will 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 card transactions.
“Giving consumers choice in how and where they pay is essential to our goal of being a customer champion and we welcome the opportunity to work with more partners like Visa who share our vision,” said Dan Schulman, president and chief executive officer, PayPal.
“Our agreement provides a framework for our companies to work together collaboratively,” said Charlie Scharf, chief executive officer, Visa. “PayPal has built industry leading capabilities which complement those of Visa and our clients, and working together, we will be able to deliver better solutions for consumers and merchants.”