PayPal Holding Inc. (PYPL) stock rose as much as 1.24% on Wednesday following the announcement that the company has extended their partnership with Visa (V) in the Asia-Pacific. The partnership, originally only in the United States, will allow the companies to boost digital transactions in the Asia-Pacific.
PayPal and Visa users will have the option to pay with either mode of payment when checking out online.
PayPal’s deal with Visa in the United States has been fruitful for the company despite PayPal keeping the deal’s specific boost to transactions under seal. The company has stated that there have been fewer customer complaints since the company’s deal with Visa.
The deal further helps expand PayPal’s reach outside of online payments. Visa will be able to offer their credit options online when a person chooses PayPal as their credit card processor. PayPal will benefit from Visa’s reach in the Asia-Pacific by being an option at physical stores where Visa cards are already accepted.
PayPal shifted the company’s focus from merchant accounts and being a digital platform to working alongside e-commerce companies, banks and credit card companies. The goal of the transition away from only a digital platform is to build loyalty among the 200 million users of PayPal.
Asia is a market that is known for being card-oriented.
Customer choice has been a sticking point for PayPal. The company states that customers leave the PayPal platform when they have dissatisfaction with their available payment choices. PayPal’s partnership with Visa is an attempt to keep customers using the platform for longer.
The company’s partnership with Visa is expected to grow further, although both companies have declined to comment on where the next extension of the partnership will take place. PayPal also has a partnership with MasterCard, which it will leverage to enter other markets.
PayPal confirms that a third of their payments come from mobile platforms.
The company is expected to expand into India’s cashless society and Indonesia. The two countries have a lack of banking service access, but are known for their active cell-phone usage. Adoption in India would extend PayPal’s reach to an additional 1.2 billion consumers.
PayPal’s earnings report indicates that 54% of the company’s revenue comes from overseas. The company does not provide a breakdown of their revenue sources by country.
Amazon (AMZN) and PayPal are also in talks to bring PayPal to the retailer’s consumers. The talks would allow PayPal to be offered at the world’s leader in e-commerce, but the launch of Amazon Cash has investors worried that the deal may not reach fruition.
The online retailer would benefit from the growing number of consumers that don’t have bank accounts to access. PayPal’s and Amazon’s talks would lead to one of the largest partnerships for the payment platform.
Amazon Cash allows consumers to print out a barcode and pay cash at participating retailers to add to their Amazon balance. The extra steps for consumers to pay for their goods may prove to be unpopular for a platform that has grown on one-click checkouts and fast shipping