PayPal Partnership With Credit Cards Aims at Gaining Ground in Physical Stores
October 25 2016 - 8:54PM
Dow Jones News
By Deepa Seetharaman
LAGUNA BEACH, Calif. -- PayPal Holdings Inc. is looking for
allies in the real world.
PayPal partnered with MasterCard Inc. and Visa Inc. -- rather
than compete with them -- to gain a foothold in the 90% of retail
transactions that still take place in physical stores, Chief
Executive Dan Schulman said Tuesday.
"We think we can be great allies...to advance the cause of
digital payments," Mr. Schulman said at the WSJDLive conference in
Laguna Beach, Calif.
The company recently struck deals with the credit-card companies
as part of its strategy to make PayPal a universally accepted
method of payment, a year after it split off from eBay Inc.
"People are starting to partner with us and use our capabilities
instead of competing," Mr. Schulman said.
He added that mobile phones were blurring the lines between
shopping online and in stores. "In the not-too-distant future,
commerce will just be commerce," he said.
But some analysts have argued that deals with MasterCard and
Visa come at the expense of profitability in the short term. The
moves shift PayPal away from promoting free bank transfers to fund
customers' transactions and toward the networks, which charge a
fee.
Mr. Schulman said that while transaction costs will rise,
engagement from new users will rise as well. "Over the medium to
long term, this is a tremendous positive for PayPal," he said.
Mr. Schulman said PayPal's cash pile is an advantage. The
company reviews more than 100 possible acquisition targets every
quarter -- but it wouldn't acquire a bank.
(END) Dow Jones Newswires
October 25, 2016 20:39 ET (00:39 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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