Mastercard-PayPal Pact Targets Payment Friction With Unified ID

Mastercard and PayPal have partnered to co-develop features using Mastercard’s One Credential, a solution that enables consumers to use a single credential when shopping online or in-store.

The companies aim to use this solution to give consumers more choice and control over how they pay at checkout, allowing them to access multiple payment options, they said in a Wednesday (June 4) press release.

One Credential can also help PayPal users improve their creditworthiness and progress from debit to installments and other structured credit, according to the release.

“We both want to reduce friction for consumers and bring them more power over how they pay,” Chris Sweetland, senior vice president of partnerships at PayPal, said in the release.

Bunita Sawhney, chief consumer product officer at Mastercard, said in the release that the partnership with PayPal will build on “our collective strength of global payments innovation.”

“With One Credential, we’re delivering the personalized digital experiences that build consumer confidence and trust,” Sawhney said in the release.

Mastercard announced its creation of One Credential in February, saying this digitally connected credential will allow consumers to choose to pay with debit, installments, prepaid or credit.

Users can set their preferences online or in an app. They can also set preferences based on transaction type and time. For example, users can specify their checking account for expenses under $100, their credit card for expenses over $100 and installments for occasional larger purchases.

“Today’s consumers expect to be in the driver’s seat,” Mastercard Chief Product Officer Jorn Lambert said in a February press release. “That’s what sparked One Credential. It gives people an innovative way to pay that’s truly personalized to them.”

Mastercard is now rolling out One Credential as a network-level capability worldwide, according to the Wednesday press release.

Consumers are demanding a broader range of payments and financial solutions from their primary banking relationships, Sawhney told PYMNTS in an interview posted in February.

Most consumers “have a high desire to have tools that help them become strong and confident money managers,” Sawhney said. Key to that goal is having visibility and transparency into, and control over, cash flows.