Eye on PayPal: Cross-Border With Citi; Transit Ticketing in Germany

PayPal Holdings Inc.’s latest financial-institution collaboration emerged Monday with news that institutional clients of Citigroup Inc. will be able to make payments directly into PayPal digital wallets globally starting in the first quarter. The arrangement opens up for PayPal Citi’s WorldLink cross-border payments network, which will be used to connect financial institutions, international companies, and public-sector entities to holders of PayPal accounts.

WorldLink connects to more than 3,500 clients in nearly 200 countries and relies on both physical branch networks and Citi’s links to about 250 local and regional clearing systems, according to Citi. PayPal serves 300 million accounts in more than 200 countries and works with 25 currencies.

For Citi, the new service will offer a real-time payment capability to institutional clients. “Combining Citi’s cross-border capabilities with the truly digital and seamless client experience delivered by PayPal will enable our clients to pay from anywhere to anywhere instantly, meeting their evolving needs,” said Manish Kohli, global head of payments and receivables at Citi’s Treasury and Trade Solutions unit, in a statement. 

“We’re seeing global financial institutions, corporate enterprises, and public-sector entities needing more flexible ways to deploy payments,” said Jim Magats, head of global payment product and engineering at PayPal, in a statement. This need, he said, arises as “consumers are increasingly turning to mobile devices and digital wallets to manage and move their money.”

This latest collaboration between PayPal and Citi follows a major strategic about-face PayPal executed in 2016 to work more closely with banks and the major card networks, after years of operating more or less competitively with them. Monday’s news also follows Citi’s announcement in March that its Treasury and Trade Solutions unit was building capability for consumers to pay institutional clients using cards, e-wallets, and new bank-transfer methods such as request to pay and open banking.

Also on Monday, Cubic Corp.’s Cubic Transportation Systems unit said its client, the Rhein-Main-Verkehrsverund transit system in Germany, has integrated PayPal so riders can use their PayPal accounts on their mobile devices to pay for weekly and monthly passes, representing the first time riders on the RMV system can use a smart phone to pay for these passes. PayPal payments are available in the metro and rural area around Frankfurt, according to Cubic’s announcement.

The RMV serves some 788 million bus and train riders yearly. Altogether, PayPal has 23 million active accounts in Germany.