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PayPal Holdings Inc. early Wednesday launched PayPal World, a series of partnerships that will connect digital wallets outside the United States to its platform and enable interoperability with PayPal and Venmo wallets at the point of sale.
PayPal World, which will go live this fall, will enable users to pay international businesses using their domestic payment system or wallet and local currency. Users will also be able to initiate cross-border money transfers.
International wallet providers supported by PayPal World are Mercado Pago, NPCI International Payments Limited (UPI), and Tenpay Global, in addition to PayPal and Venmo. All wallet partners will be interoperable with PayPal and Venmo, while more wallet providers are expected to join PayPal World.
The launch of PayPal World will give PayPal more of the “critical mass” it needs to thrive with consumers and merchants, says Thad Peterson, a strategic advisor at Datos Insights.
“PayPal World provides a connection to the global mobile-money platforms like Mercado Pago, opening the PayPal platform to millions of additional customers and merchants,” Peterson says by email. “By incorporating Venmo into the solution, they also enable a very simple and low friction tool for cross-border payments, one of the most complex and high-friction areas of the payment space.”
Described by PayPal as a “real game changer over time,” PayPal World leverages open-commerce application programming interfaces to create a technology-agnostic platform. That interoperability will expand the reach of wallet partners to nearly 2 billion users and enable them to penetrate new geographic markets for payments, PayPal says.
“While digital wallets and payments have become the preferred payment method in many markets domestically, consumers still require an international payment method to shop overseas,” PayPal says in a blog post on its Web site announcing PayPal World. “Sending money across borders can be similarly frustrating, with consumers facing fees, barriers, and delays.”
Use cases for PayPal World include a PayPal user paying for a purchase at a merchant outside the U.S. in a local currency using her PayPal wallet. For example, a PayPal user traveling in China could make a purchase at a merchant that accepts WeChat Pay, also known as Weixin Pay, by scanning his or her PayPal wallet at the point of sale.
PayPal World also enables users of partner wallets to make purchases in their local currency when shopping with foreign merchants. For example, a UPI wallet user shopping online with a U.S. merchant could complete a purchase by clicking on the PayPal icon at checkout. Next, the user is shown the UPI button, which, when clicked, completes the purchase.
When it comes to sending money across borders, Venmo users in the U.S. open the Venmo app, type in the phone number of the recipient in another country, and select their PayPal wallet to complete the transaction.
“PayPal World increases the value of partner wallets by creating an interoperable payment capability that transcends borders and payment types,” Peterson says. “That also opens up sales opportunities for participating merchants to sell into markets using different payment types than those offered in the merchant’s country. This is a significant breakthrough for global payment interoperability.”
