PayPal Teams up with Android Pay to Make Paying with Your Mobile Phone Easier

Android Pay users in the US will soon be able to make payments with their PayPal balances at thousands of new retailers, including Walgreens, Dunkin’ Donuts and Subway.

Google and PayPal have extended their strategic partnership making it possible to use PayPal as a payment method in Android Pay. Photo: Official Gates/Flickr

Google and PayPal have extended their strategic partnership making it possible to use PayPal as a payment method in Android Pay. Photo: Official Gates/Flickr

Digital payment services provider has announced the deal with Google’s mobile payments platform Android Pay to let users pay via PayPal at retailers in-store, in-app and online. Initially, Android users will be able to use their PayPal balance as a payment option, but will later enable them to use credit cards they stored with PayPal.

The partnership will enable anyone with a PayPal account to link it to Android Pay and use their credentials to pay at stores which accept Android Pay. The integration will make it easier to install Android Pay, as you won’t have to insert all your credit card data from scratch.

“This is the next logical step in our desire to partner with everyone in the ecosystem,” Aunkur Arya, senior vice president at PayPal unit Braintree, told Bloomberg. “These partnerships don’t happen unless there’s value for both sides.”

The deal between the two companies could trigger speculation about the possible acquisition of PayPal by Google, says Bloomberg. In 2015, PayPal became a standalone company, splitting from eBay after 13 years together. Last year, the company, which has more than 197 million users, processed over $354 billion in digital payments.

“The more closely they work together, the more potential there is for a future combination,” said Gil Luria, director of research at D.A. Davidson & Co. PayPal.

The PayPal integration with Android Pay will be supported on Android OS 4.4 and higher, including Lollipop, KitKat, Marshmallow and Nougat. PayPal has been available as a payment option in the Google Play store for almost three years already. However, it is not available as a payment method in Apple’s digital wallet.

The move is expected to drive the adoption of Google’s mobile payment platform, which is now the major competitor to Apple Pay.

The financial services company Motley Fool recently analyzed the competition between Google and Apple and found out that Apple Pay is holding the lead within the mobile payments sector. The problem is that Samsung, LG, Huawei, and other devices that support Android OS developed their own payment solutions, so the company has to compete not only with Apple Pay but also against other devices. Apple Pay is the most-accepted payment system, used by 36% of retailers, while Android Pay is accepted by 24% of retailers. Samsung Pay, meantime, is the third leading payment app, with 18% of merchants using the service.

Last month, Samsung announced that its payment platform will soon be available at thousands of merchants worldwide where Visa Checkout is accepted. By collaborating with Visa, the company expects to improve checkout experience, making it faster, easier and more secure. Moreover, the company has recently announced the launch of Samsung Pay in India.

Social media giant Facebook now looks like a direct competitor to Samsung, Apple, and Google, as it has big plans for its payment platform on Messenger. Earlier this month, the company extended the functionality to group payments.

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