Android Pay flexes partnership muscle with PayPal deal

PayPal has been granted its first real opportunity to play a role in brick & mortar commerce thanks to a partnership with Android Pay. Under the deal, PayPal users can leverage their PayPal balance – and soon credit and debit cards linked to their PayPal account – to make payments at the point of sale via Android Pay. The collaboration offers PayPal the prospect of extracting net-new payment volumes from a channel it has lacked exposure to, while potentially opening up Android Pay to millions of new users.

PayPal's inclusion in Android Pay is enabled in the back end by a series of recent partnerships it has struck with payment networks such as Discover. While these partnerships are not exclusive to Android Pay enablement, Google has beaten both Apple Pay and Samsung Pay to market with integration, granting it priority access to PayPal's more than 200-million-strong user base. This will impact Samsung Pay most acutely, given it competes directly with Android Pay for users on the same operating system.

Android Pay continues to demonstrate a strong approach to partnerships, wisely acknowledging that collaboration is the basis of broadening wallet value for users and stakeholders alike. The PayPal announcement comes on the heels of several mobile banking integrations Android Pay has enabled with the likes of USAA and Bank of America. These partnerships provide Android Pay more direct access to new users while offering issuers greater ownership of mobile wallet onboarding.

Jordan McKee

Principal Analyst

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