Discover signs new terms with PayPal

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Discover and PayPal have signed an agreement to make PayPal payments available to Discover cardholders, acquirers and merchants.

The new agreement provides PayPal with access to Discover’s tokenization services and expands PayPal’s reach at the point of sale. It also enables PayPal customers with eligible Discover cards to use their Cashback Bonus to pay for purchases at the millions of online and mobile merchants that accept PayPal.

Discover has worked with PayPal since an agreement in 2012 to increase PayPal in-store transactions, but that initiative stalled when some key processors did not accept those transactions.

David Paul Morris/Bloomberg

“Discover is focused on making the payments experience seamless and secure for both cardmembers and our merchant partners,” Diane Offereins, president of payment services at Discover, stated in a Jan. 11 press release. “This agreement with PayPal helps expand consumer payment choices by providing additional ways to transact, and builds on the growing adoption of digital payments.”

PayPal spent the latter part of 2016 establishing similar arrangements with Visa and Mastercard, essentially signaling to the card brands that it would put their products on equal footing as ACH payments, which it has long favored as a funding method for PayPal accounts.

Similarly, Discover cards will be presented as a clear payment option within the PayPal wallet, making Discover easily identifiable to cardholders when paying.

“The agreement with Discover leverages each company’s core assets, will add value to everyday spending, and deliver great customer experiences,” Bill Ready, chief operating officer at PayPal, said in the release.

“Discover has been a long-term strategic partner for PayPal, and we expect that collaborative relationship to continue as we work to offer our joint customers more choice and increased value online, in app and in store," Ready added.