PayPal is expanding its reach into US point-of-sale payments by integrating its debit card with Apple’s mobile wallet and offering 5% cashback rewards. This move aims to position PayPal directly against tech companies and banks.
Under the leadership of new CEO Alex Chriss, who joined from Intuit last year, PayPal is shifting focus from its traditional online and peer-to-peer payment services to in-person transactions.
The company’s debit card now provides 5% cash back on selected purchases, with a limit of $1,000 per month. Additional rewards are available through partnerships with brands like DoorDash and Sephora.
“E-commerce has obviously been one of the fastest growing areas where people are spending their dollars… but it’s not everything,” Chriss said. “Now consumers can use PayPal for every purchase, everywhere, every time.”
Today, we’re ushering in a new era for customers, making it easier and more rewarding than ever to shop and pay with @PayPal anywhere, anytime – both in stores and online. PayPal is a go-to payment option for hundreds of millions of customers’ online purchases, and now we’re… pic.twitter.com/WhJ2JpLt1F
— Alex Chriss (@acce) September 5, 2024
Mobile Payments Competition Intensifies
The US debit card payment market has grown significantly, reaching $4.55 trillion in 2021, up from $2.47 trillion in 2015, according to Federal Reserve data. Chriss noted that as consumers become more cost-conscious, they are increasingly turning to debit cards to manage spending.
PayPal’s debit card will also support Apple Pay, allowing users to utilize mobile wallets and “tap to pay” features. The 5% cash-back offer makes PayPal’s debit card competitive, as only 24% of debit cardholders earned cashback rewards in 2023, compared to 74% of credit cardholders, according to Valuedynamx.
Despite PayPal’s historical dominance in online payments, competition from Apple and Google has intensified in the mobile payments sector, impacting PayPal’s market share.
