Multi-Channel: Partnership between PayPal and MoneyGram

• PayPal has just partnered with MoneyGram to allow its users to make cash deposits and withdrawals to and from their prepaid accounts at more than 280,000 MoneyGram locations worldwide. This service will first be tested in the US starting 2013.

• The partners are mostly targeting unbanked and under-banked customers, and, according to PayPal, the point is to open the online market to people without a bank account or card, and to diversify e-commerce revenue sources through adding cash payment as an option.

• Customers will be charged a commission to use MoneyGram’s network (the amount remains to be known).

Notre analyse

• This partnership highlights the complementarity of physical and online worlds and allows PayPal to access a new distribution channel.
• Last May, PayPal already partnered with CoinStar for similar reasons and started allowing its users to deposit cash onto their PayPal account through CoinStar’s kiosks. The partners then noted that customers having loaded 100 dollars in cash actually spent about 150 dollars online (and paid the remaining amount by card).
• The two folds of this new offer are to benefit to the e-commerce sector and ease customers’ access to cash. Plastic-based top-up possibilities have also been illustrated by the possibility for users to load funds to their PayPal account using Green Dot MoneyPak cards (available in stores).