Mobile Payments

PayPal And Android Pay Team Up To Take On Digital Payments

“How can you compete?”

That was the big question that PayPal's COO Bill Ready told Karen Webster he was asked multiple times a week two years ago when PayPal was on the verge of being spun out of eBay. The conventional wisdom then, Ready said, was that the “big guys” would be fierce competitors since each of them had eyes on the same digital payments prize. PayPal, he was told, was a “great business” but one that analysts said could never withstand the firepower that would be aimed at them from players “so much bigger.”

“That turns out to be the wrong question to have been asked,” Ready joked.

Nearly two years later, PayPal is a global digital payments network; one that’s staked its future on helping consumers and retailers meet anywhere there’s an opportunity to do business. And helping anyone who shares that vision to do that, too. PayPal’s focus on creating partnerships with many of the same “big guys” that analysts were sure would crush them, has answered that question for analysts, at the same time it’s helped many of its partners answer the same question of them.

“That is how we grow, by being a great partner to the rest of the ecosystem,” Ready noted. “Many of the players that everyone thought would be our biggest competitors are, now in fact our partners — because we are able to deliver a lot of value to them.”

And, today, that list of partners got a little longer.

Consumers will now be able to use PayPal as a payment method inside of Android Pay wherever Android Pay is accepted, in-store, in-app and online.

Issuers will benefit, too.

PayPal’s partnerships with Visa and Mastercard will make it possible for issuers whose cards are registered inside of the PayPal wallet to have those cards available to be used across all of those digital touchpoints. And without paying more to get the benefit of that expanded digital distribution.

Why The Pair-Up?

Ready noted that PayPal’s latest work with Google is more an expansion of work the two firms have been doing together for some years - both as part of PayPal’s core business and under the Braintree banner.

This latest step, Ready noted, is a natural evolution to that partnership and when seen in the context of PayPal’s bigger goal is one that makes total sense.

“Android is the biggest operating system in the world - and our job is to enable commerce in a variety of new contexts,” Ready said. “With Android Pay and Android’s reach, we see an opportunity for consumers and merchants to find and create many new contexts and touchpoints. We are excited to be part of that journey.”

It’s a journey that card issuers can enjoy, too.

PayPal’s card network integrations means that issuers have easy access to Android Pay digital acceptance without building it themselves or paying for access. Consumers get choice, issuers get digital distribution and merchants make sales across all of the environments consumers like to shop — in-store, online and in-app.

Helping Everyone Do Their Own Best “Thing”

One of the things that’s evident as the digital payments landscape has evolved over the last two years, is the importance of making sure that payments don’t get in the way of a consumer and merchant making a sale. As Webster and Ready mused, sometimes the best thing that a payments platform like PayPal can do is to let the ecosystem leverage its capabilities so that they can find new and novel ways to payment-enable the use cases that matter most to them.

“It gives everyone a chance to do what they do best,” Ready emphasized

For Android Pay and PayPal, that seems sure to evolve to include those that amplify Google’s core business — search and advertising. Payments, is a pivotal part of closing the loop and turning a click from a website into a sale, which, in turn drives more advertiser interest.

“[PayPal] converts at more than twice the pace of the rest of the market,” Ready said. “because of our advantage as a two-sided network, serving customers and merchants around the world.”

PayPal in its blog post announcing the partnership, said that it processed $102 billion in mobile payment volume and 2 billion mobile payment transactions in 2016.

Consumers will be able to use PayPal in Android Pay in the U.S. and at retailers including Uber, Walgreens, and Dunkin' Donuts. PayPal consumers will be able to spend their PayPal balances and in the months to come will include debit and credit cards stored in the PayPal wallet via its Visa and Mastercard integrations.



About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.

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