Mastercard And Visa Gain Strength, But Did PayPal?

The deal between Mastercard and PayPal announced Sep. 6 was different for a day than the Visa-PayPal partnership announced in July. Mastercard spokesperson Robyn Cottelli says being a payment choice in PayPal’s checkout is crucial, but not the only draw.

“Our thoughtful approach to the partnership with PayPal was not just focused on prominence as a payment option, but going beyond what we’ve seen Visa announce to drive further value for Mastercard and our partners,” Cotelli tells

She specified that Mastercard will be expanding its Masterpass acceptance footprint by making it easy for top digital merchants that use (PayPal’s) Braintree as a gateway to add Masterpass as a payment option both on browser and in-app. Visa announced the same day that Visa Checkout will be available as a payment option at all merchants who use Braintree for payments. That includes brands like Airbnb, Eventbrite, Uber and Pinterest.

“We are also working with PayPal to align the Masterpass and PayPal APIs so that integration with both platforms at the same time is easy and seamless,” she says. “This advances our issuer-led digital strategy and was a key element of building a holistic and thoughtful partnership with PayPal.

Cotelli, the brand’s vice president of North American communications, says that to maintain Mastercard prominence in PayPal wallet positioning, the deal includes protections against targeting.

“Once a consumer has a Mastercard as their default card, PayPal can’t, by itself or on behalf of someone else, market to that consumer in an effort to have them switch their default card,” Cotelli says. “PayPal will work with Mastercard issuers in good faith on options that allow consumers to initiate and conclude PayPal Wallet transactions at the physical point of sale via a deep linked bank application to ensure an issuer-centric experience.”

Double Diamond Group partner and principal of AZ Payments Group Rick Oglesby says it appears PayPal is trying to make the deal as equal to the Visa deal as possible. He says that although PayPal has agreed to tokenize for use at the physical POS, there is no clear path to monetizing those transactions. So the deals don’t mean that PayPal is about to make another big push to gain share at the POS.

“Visa and MasterCard have adopted enablement strategies where they are working with a multitude of players in the digital economy to become the digital payment backbone that accelerates digital growth,” Oglesby says. “However they have their own prescribed approaches, so these agreements are PayPal agreeing to work within the prescribed approach, which opens the door to working in a variety of potential banking and network partnerships. It’s a very big change for PayPal, the networks, and the banks.

“Clearly, one of PayPal’s goals was to enable partnerships with the banks in order to facilitate more growth. PayPal is in a very good position to continue and/or even accelerate its growth due to the increasing digitalization of the economy. It is in a better position if it can work together with the networks and banks than if those parties are constantly working in direct competition.”