January 17, 2017
Dan Schulman became PayPal’s CEO nearly two years ago and, other than overseeing its separation from eBay, his most important initiative may be a series of partnerships with the major card networks that continued this week with Discover. The strategy, in which PayPal forgoes some transaction revenue to enable more visibility with credit card holders (and make it more likely that they use their cards as a PayPal funding source), also is an effort for the online payment pioneer to expand as a payment option in stores. The most recent agreement gives PayPal access to Discover’s tokenization services enabling cardholders to use their cards within the PayPal wallet to make contactless purchases at merchants that accept Discover. The company struck similar pacts in the fall with Visa and MasterCard.
“Offering greater customer choice is a key priority for PayPal, which we have advanced through a recent series of strategic partnerships,” said Bill Ready, COO of PayPal. “The new agreement will make it easier for PayPal customers to find and choose Discover as a funding option within the PayPal wallet, and let eligible customers pay with their Discover Cashback Bonus at all the places that accept PayPal. By giving PayPal customers more places to use PayPal wallet and Discover, they have even more convenient and valuable ways to pay with their Discover cards and spend their rewards. We anticipate this agreement may drive incremental spend for both companies.”