PayPal and Walmart have inked a strategic partnership to offer financial services products to shared customers. Most notably, PayPal will let users deposit and withdraw cash from their PayPal accounts inside Walmart stores, marking the first time PayPal balances can be accessed in such a way inside of a brick-and-mortar environment.
The companies have also agreed on an exclusive $3 service fee for the cash in and cash out options. Additionally, PayPal Cash Mastercard customers will be able to access their cash balance using Walmart Service Desks, ATMs and cash registers.
PayPal chief executive Dan Schulman noted that this the first time the two companies are working together in this capacity.
"Today's news is the first time our two companies are working together to build products for our shared customers," said Schulman. "We consider this a key collaboration for both PayPal and Walmart."
The service primarily targets the unbanked and underbanked, meaning people who can't afford or don't have access to mainstream financial services that make electronic banking possible. A 2015 survey from the Federal Deposit Insurance Corp. estimates around 7 percent of US households are unbanked, while 24.5 million households were considered underbanked.
PayPal has been keenly focused on the unbanked and underbanked demographic, evidenced by its 2017 acquisition of Canada-based bill-pay processor TIO Networks. Earlier this year, PayPal committed to rolling out more traditional banking features for the underbanked, including FDIC coverage of the PayPal Wallet, online check deposit, and a debit card that can be used to withdraw cash.
PayPal previously offered a debit card that allowed users to load cash to their accounts at retail locations.
PayPal held its bi-annual investor day on Thursday and outlined key points of its growth strategy as its rivalries with Square and Amazon heat up.
The deal would help PayPal compete with Square for space in physical storefronts.
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