PayPal is expanding its presence in the U.S. point-of-sale payments sector 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 in the in-person payment space.
This initiative is, part of a broader turnaround strategy , led by new CEO Alex Chriss, who joined the company from Intuit last year. Despite PayPal’s dominance in online and peer-to-peer payments through its Venmo app, it has not previously focused on in-person transactions.
Chriss noted, “E-commerce has obviously been one of the fastest-growing areas for consumer spending, but it’s not everything. Now, consumers can use PayPal for every purchase, everywhere, every time.”
The new point-of-sale offering includes a 5% cashback on selected categories, up to $1,000 per month, along with additional rewards from brands like DoorDash and Sephora.
The value of U.S. debit card payments has surged in recent years, reaching $4.55 trillion in 2021, up from $2.47 trillion in 2015, according to recent data from the U.S. Federal Reserve.
Chriss pointed out that consumers are increasingly budget-conscious and gravitating toward debit cards to stay within spending limits. PayPal will also enable customers to use debit cards with Apple Pay, aligning with the growing trend of mobile wallets and “tap to pay” options.
The 5% cashback on a user’s chosen category makes PayPal’s debit card one of the more competitive cash-back offerings, with only 24% of debit cardholders earning cash-back rewards in 2023 compared to 74% of credit cardholders, according to a report by purchase rewards firm Valuedynamx.
While PayPal has historically had a first-mover advantage, analysts note that increasing competition from Apple and Google has eroded some of its share in the mobile payments market.
(INPUTS FROM REUTERS)
