Stocks in MasterCard are up following the revelation Tuesday that the credit card company will partner with online giant PayPal. The deal will make it easier to link PayPal payments to a MasterCard, if you have one, and it’s similar to an agreement PayPal already has with Visa. These deals resolve ongoing tension between companies that have historically been competitors in online payments, allowing consumers to easily link their debit cards to their PayPal accounts.
The play: to get more people using phones to make payments in stores.
If you haven’t paid for something at a store using your smartphone yet, Forrester analyst Brendan Miller said it’s a matter of time. But Apple Pay, Android Pay, PayPal, and the like are all still working out the kinks.
“This is a long-term shift,” he said.
Joy Hackenbracht is with the Pew Charitable Trusts, which studies consumers’ views of mobile payment. She said seven in 10 adults in the U.S. have smartphones, but they’re not all comfortable with using them as wallets.
“Millennials and baby boomers to the same extent they’re concerned about the safety of the technology,” she said.
When it comes to reassuring customers that mobile payment is secure, and that you don’t risk having your information stolen or data mined, mobile payment services have a ways to go. But Hackenbracht said there’s a lot of potential there, as a majority of people with smartphones are aware of the technology and open to using it.
While transactions processed through Visa or MasterCard will initially cost PayPal marginally more than direct deposits, the hope is to increase the overall numbers of people using PayPal, whether on a computer or through their phones.