As a payment handling service, deals with e-commerce websites, retailers, and traditional payment providers like Visa and MasterCard are PayPal's lifeblood. Using the systems that it has affiliated itself with as a backend, a link of sorts ties the regular channels that businesses and banks expect to find, PayPal has been slowly expanding their options over the years, giving customers more and more freedom as to how they want to pay for things. In the process, they have been building a symbiotic relationship with financial providers by allowing them to influence how the service works or certain branding elements on a small level. One such deal, PayPal's relationship with MasterCard, got just a little bit sweeter when an announcement on Monday brought a number of changes meant to give both parties more visibility and viability in each other’s workings.
For starters, MasterCard is to be presented as "clear and equal payment" within the PayPal Wallet, making the option easier for PayPal customers to find and much more prominent, which will lead to them being used more often at compatible retailers. In that same vein, MasterCard will now be an option that customers can choose to set up automatic payment with, making using MasterCard via PayPal that much more convenient. PayPal will also no longer ask MasterCard customers to link their account up to a bank account via ACH, making life a bit easier for all customers and making it viable for prepaid MasterCard customers to use PayPal as their payment method of choice. Finally, a digital representation of a customer's card will be shown on all transactions.
In return for all of that exposure within PayPal, MasterCard has agreed to stop charging PayPal a digital wallet operator fee for transactions, which will make it feasible for them to handle more and more payments from MasterCard customers as NFC terminals take off and people either decide against using Android Pay, Samsung Pay and Apple Pay, or cannot use them for whatever reason. This should, theoretically, result in more MasterCard customers choosing to go through PayPal for their everyday payment needs both in and out of a retail setting.