PayPal is expanding into U.S. point-of-sale payments with an ambitious new strategy under CEO Alex Chriss, integrating its debit card with Apple Pay and offering 5% cashback rewards to attract in-person shoppers. This move marks PayPal’s push to compete with tech companies and banks for a slice of the in-person payments market, including transactions at stores, cafes, and restaurants.
While PayPal has dominated online payments and peer-to-peer transactions via its Venmo app, it hasn’t heavily promoted its products for in-person purchases — until now. “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.”
The push includes a 5% cashback offer on selected products, up to $1,000 per month, and additional rewards from brands like DoorDash and Sephora. The integration with Apple Pay also allows customers to take advantage of mobile wallets and “tap to pay” options, providing more flexibility for in-person transactions.
This shift comes as the value of U.S. debit card payments surged to $4.55 trillion in 2021, according to the U.S. Federal Reserve. Consumers, more cost-conscious in a tight economy, are increasingly opting for debit cards, which help them stay within their spending limits. The 5% cashback on a category of the user’s choosing makes PayPal’s debit card among the more competitive cashback products on the market. Only 24% of debit cardholders earned cashback rewards in 2023, compared to 74% of credit cardholders, according to a report by Valuedynamx.
Despite its success in online transactions, PayPal faces rising competition from Apple and Google in mobile payments. To support its expansion into in-person transactions, PayPal is making its largest-ever marketing investment, although the company hasn’t disclosed exact figures. Chriss has called 2024 a “transition year” for PayPal, as it aims to grow revenues beyond transaction volumes. Earlier this year, PayPal launched artificial intelligence-driven tools and a one-click checkout feature to streamline user experience.
While PayPal’s stock price has risen more than 17% since the start of the year, it still trails behind the S&P 500’s 22% gain. Nevertheless, with the company’s aggressive push into the in-person payments market, PayPal is aiming to solidify its position as a major player both online and offline.
Your First 10 AI Skills
10 practical AI skills, copy-paste prompts and a 7-day plan to start using AI with confidence.
Download the guide →