PayPal, MasterCard Reach Deal for Store Payments

MasterCard said yesterday it had expanded its deal with payment processor PayPal Holdings Inc, which would allow customers to use PayPal's payment services in stores.

PayPal's partnership follows a similar deal with MasterCard's larger rival Visa Inc in July as the company looks to expand its payments network.

PayPal will allow users to select a credit or debit card as the default payment method and share data on transactions made through MasterCard's tap-and-pay feature, which allows the shopper to wave a card or mobile phone over a reader to pay, the companies said in a statement.

As part of the deal, MasterCard will allow PayPal users to withdraw cash from their accounts using a debit card and also waive the digital wallet fee it currently charges PayPal.

The two companies have an existing partnership for co-branded consumer credit cards in the United States and Puerto Rico.

PayPal, spun off from e-commerce company eBay Inc last year, has focused on aggressive growth.

The company's revenue in the second quarter rose more than 15 percent to $2.65 billion from a year earlier and the volume of payments it processes jumped 28 percent to $86.21 billion.

PayPal is also in discussions with banks that issue cards, to explore new products and partnerships, the Journal report said, citing people familiar with the matter.

The world of mobile payments has been a fragmented one. For a few years now, phone makers, retailers and others have been keen on getting you to buy goods in stores with the wave of your phone at the point-of-sale system. But services such as Apple Pay, Samsung Pay, Android Pay and Walmart Pay have generally been limited to their makers' own devices, software or stores.