By Leena Rao
April 18, 2017

PayPal will become one of the mobile payment services available to users of Android Pay, Google’s digital wallet for Android phones, turning two major payment rivals into partners.

Android Pay lets shoppers pay at store checkout counters by waving their Android smartphones in front of wireless readers equipped with near-field communications (or NFC) technology. Instead of using cash or taking credit cards from their wallets, shoppers upload their credit and debit card information to the mobile app to pay.

Now people will have the option of linking their PayPal accounts to Android Pay, giving PayPal additional reach. Meanwhile, Google hopes the move will make Android Pay attractive to more users amid its battle with rival Apple Pay, a similar service that that has no PayPal (PYPL) partnership.

Android Pay and PayPal’s mobile wallet also both compete against Samsung Pay, a lesser known mobile wallet from electronics giant Samsung. It too is incompatible with PayPal.

PayPal’s chief operating officer, Bill Ready, said that his company’s partnership with Google will be implemented in the coming weeks. PayPal will allow Android Pay users to tap that credit and debit cards stored in PayPal and to use any cash balances they keep there.

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In addition using Android Pay in stores, people can use the service to pay for products and services available in mobile apps like Uber or Airbnb. PayPal’s digital wallet can be used similarly.

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While Google (GOOG) has offered PayPal as a payments option on its Play mobile store for a number of years, it’s surprising that Google is now cooperating with PayPal. Adding PayPal could bring more users to Android Pay, especially on mobile. PayPal has nearly 200 million active users on mobile. In 2016, PayPal processed $102 billion in mobile payment volume in two billion mobile transactions it handled.

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