PayPal takes on the High Street with in-store payments programme

Global online payments giant PayPal, is making a significant push into in-person payments by integrating its debit card with Apple Wallet and offering generous cashback rewards.

This move marks a strategic shift for the company as it seeks to compete directly with both tech firms and traditional banks in the lucrative point-of-sale market.

The initiative, dubbed "PayPal Everywhere", was announced on Thursday as part of an ambitious turnaround strategy led by Alex Chriss, who joined as chief executive officer last year from Intuit. While PayPal has long dominated online and peer-to-peer payments through its main platform and Venmo app, it has not previously encouraged consumers to use its products for in-store purchases.

"E-commerce has obviously been one of the fastest growing areas where people are spending their dollars... but it's not everything," Chriss said. "Now consumers can use PayPal for every purchase, everywhere, every time."

Central to the new offering is an enhanced rewards programme allowing users to select a monthly spending category, such as groceries or clothing, to receive 5 per cent cashback on up to $1,000 in purchases. Customers can also stack additional rewards from popular brands like Sephora, Domino's, and DoorDash when using PayPal online.

The move into point-of-sale payments comes as the value of US debit card transactions has surged in recent years, reaching $4.55 trillion in 2021, up from $2.47 trillion in 2015, according to Federal Reserve data.

PayPal's 5 per cent cashback offer on a user-selected category positions it as one of the more competitive debit card products in the market. A recent report from purchase rewards firm Valuedynamx showed that only 24 per cent of debit cardholders reported earning cashback rewards in 2023, compared with 74 per cent of credit cardholders.

The integration with Apple Pay is another key aspect of PayPal's strategy. Eddy Cue, senior vice president of services at Apple, commented: "We're excited to work with PayPal to bring Apple Pay to PayPal Debit Card cardholders and help deliver a seamless shopping experience to even more users."

To support this expansion, PayPal is launching its largest-ever marketing campaign to promote in-person use of its services. While the company declined to disclose the exact investment, it had previously indicated that marketing and brand campaigns would increase expenses in the second half of the year.

The move comes as PayPal faces increasing competition from tech giants like Apple and Google in the mobile payments space. Chriss has called 2024 a "transition year" for PayPal and has promised to grow revenues beyond transaction-related volume.

Despite these efforts, PayPal's stock price, while up more than 17 per cent since the beginning of the year, still lags behind the benchmark S&P 500 index's 22 per cent gain.



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