Seventeen years after disrupting the payments industry, upstart PayPal has struck a deal with Visa, founded in the 1950s. The arrangement is designed to carry significant benefits for issuing financial institutions, acquirers, and merchants, according to the announcement.
PayPal will make it easier for new and existing customers to pay with their Visa cards, while PayPal will receive “certain economic incentives,” including Visa incentives for increased volume, and greater long-term Visa fee certainty.
In addition, consumers will find it easier and faster to get access to funds: they will be able to instantly withdraw and move money from their PayPal and Venmo accounts to their bank account via their Visa debit cards leveraging Visa Direct.
The Wall Street Journal describes one of the benefits for PayPal: “The deal ends a year of tense negotiation between the firms, and removes uncertainty for PayPal about the fees it pays to Visa, with higher fees being a major threat to its profitability.”
The deal comes a day after PayPal celebrates its one-year anniversary of being a standalone public company after the breakup of eBay.
You can read Thursday’s full press release on the Visa.com website.