Walmart and PayPal announced a partnership to allow PayPal mobile app users to withdraw cash from and deposit cash into their PayPal accounts at Walmart stores, marking the first time PayPal users will be able to take both these actions in a brick-and-mortar environment, the companies said in a press release.
Under the arrangement, Walmart would charge a $3 fee for these "cash-in" and "cash-out" services. Users of the PayPal Cash Mastercard will also be able to access their balances in Walmart stores at service desks, ATMs and cash registers for the same fee.
PayPal cash-in is available now at Walmart stores, while PayPal cash-out is set to launch in all U.S. Walmart locations by early month, the companies said. PayPal CEO Dan Schulman and Daniel Eckert discussed details of the partnership Thursday in a Facebook Live presentation.
This partnership represents a significant step forward in the efforts of retailers like Walmart to support a broader array of financial services for their customers, as well as the efforts of PayPal to more closely align with brick-and-mortar retailers.
As the payments sector continues to get more crowded with a growing variety of online and offline payment options, the ability to build an in-store presence is becoming very important for PayPal. Account holders can use their PayPal balances to pay at a growing number of brick-and-mortar stores. Users have also been able to deposit cash into their PayPal accounts at brick-and-mortar store locations of some retailers, such as CVS, but this is the first time they can take money out of their PayPal accounts in such an environment.
PayPal could have pursued that capability with any number of retailers of various sizes, but forging its inaugural cash-out partnership with Walmart immediately allows PayPal to users to access these services in more than 4,000 store locations in the U.S. As Walmart's Eckert noted, about 90% of American live within 10 miles of a Walmart store, making this an extremely convenient service for PayPal users.
For Walmart, the service represents another lure to bring those consumers into its stores. But it also fits with Walmart's efforts to make stores more indispensable to consumers by offering financial services through these locations — which also opens up new revenue channels for Walmart. The retailer already has a number of Walmart MoneyCenter outlets and offers money transfer services through Bluebird and Walmart2Walmart options. It can benefit from looking for new ways to expand financial offerings, especially with Amazon starting to offer similar services.