PayPal has reached a new agreement with Apple that will see that two technology giants accept each other’s products in their respective payment ecosystems. The partnership is the latest in a series of collaborations announced by PayPal over the past few years that have sought to deepen the firm’s market penetration in the digital payments and commerce spaces.
The move was unveiled in PayPal’s Q3 2022 earnings report in which the paytech firm announced that both PayPal and its mobile payment subsidiary Venmo will be supporting Apple’s Tap to Pay on iPhones “soon” and provide both merchants and consumers with the ability to use Apple Pay to accept payments and make purchases.
In particular, the deal will allow PayPal merchants to use their iPhone and the PayPal or Venmo iOS app to accept contactless debit or credit cards and mobile wallets, including Apple Pay. PayPal will also add Apple Pay as a payment option in its checkout offerings and merchants platforms, including the PayPal Commerce Platform, the company said.
For consumers, users will also be able to add their PayPal and Venmo credit and debit cards to their Apple Pay wallet and use them anywhere Apple Pay is accepted.
Tap to Pay is a new feature introduced by Apple back in February that allows merchants to turn their iPhones into contactless payment terminals, avoiding thus the need to purchase any additional hardware. Apple had Stripe as a launch partner, with Square following suit in September.
Up until now, PayPal and Venmo’s cards weren’t available in Apple’s mobile wallet.
The two firms offer the most widely used digital wallets in the US. Apple Pay claims it is accepted at more than 90% of US retailers, and is said to be serving 507 million users, as of September 2020. PayPal, on the other hand, clocks 426 million active accounts, while its mobile payment subsidiary Venmo claimed nearly 90 million accounts in the US in Q2 2022.
The addition of PayPal and Venmo cards into Apple Pay is similar to what PayPal already has with Google Pay. Four years ago, the two companies expanded an existing collaboration to allow Google Pay customers to link their PayPal account and make purchases straight from that wallet.
Most recently, Venmo went live as a new payment option for select Amazon customers, a year after announcing the partnership. The firm is now “ramping to full availability for US Amazon customers this holiday season.”
Super app ambitions
These new agreements come in line with PayPal’s broader ambition to increase its market share, expand more aggressively in in-store payments, and eventually become the ubiquitous payment method.
Last year, the firm unveiled plans to morph into the next global super app, akin China’s WeChat and Singapore’s Grab. It subsequently launched the first version of the platform, introducing in September 2021 an app that combines all sorts of financial tools and services, including direct deposit, bill payment, a digital wallet, peer-to-peer payments, shopping tools and crypto capabilities. PayPal also inked a partnership with Synchrony Bank to launch PayPal Savings, a high yield savings account.
The firm said at a time that more features and enhancements would come in the next quarters, including investment capabilities and more payment methods.
In June 2022, it launched PayPal Monthly, a new buy now, pay later (BNPL) offering that allows US users to spread payments out over longer periods of time, and in October, it introduced PayPal Rewards, a unified rewards program for US consumers to earn points through merchant offers, deals, and other discounts, and redeem them when checking out with PayPal.
Featured image credit: edited from Freepik
