Mastercard, PayPal partner, PayPal goes physical

Mastercard and PayPal are teaming up to develop new features using Mastercard One Credential, offering consumers more choices and control over how they check out. Meanwhile, PayPal introduced a physical card that consumers can use both online and in-store.

In announcing the new card—being issued by Synchrony Bank—PayPal said customers will have access to a "limited time offer" to pay for travel purchases over six months with promotional financing and no minimum spend.

Mastercard One Credential

Mastercard One Credential is a security initiative aimed at enhancing user convenience. It integrates various authentication methods into a single credential that allows users to authenticate transactions securely and seamlessly across different platforms and devices. Visa has a similar initiative, Flexible Credential, which it began piloting in the United States in November 2024, in partnership with Affirm.

Mastercard One Credential assigns one digital credential (for example, a 16-digit card number) that can represent debit and credit cards, as well as buy now pay later, loyalty points and installment plans.

Instead of managing separate cards or accounts, the user simply presents their One Credential at checkout. The system dynamically chooses the best payment method based on the user's preset rules, merchant type, transaction amount and real-time balances.

Users manage their One Credential through their bank's mobile app, where they can set preferences (for example, always use credit for travel), change default funding sources, and monitor transactions. At checkout, the merchant only sees one Mastercard credential, not the underlying funding source; Mastercard routes the transaction to the selected funding method without requiring extra steps by the user.

The arrangement extends Mastercard and PayPal's existing partnership on payment solutions, including PayPal Debit Mastercard and PayPal Business Debit Mastercard.

"We are excited for the opportunity to innovate together with Mastercard," said Chris Sweetland, senior vice president of partnerships at PayPal. "We both want to reduce friction for consumer and bring them more power over how they pay."

Mastercard's chief consumer product officer, Bunita Sawhney, expressed similar excitement. "With One Credential, we're delivering the personalized digital experiences that build consumer confidence and trust," she said.

Mastercard, in a press release, said One Credential can help PayPal users build "healthier financial habits, as they progress from debit to structured credit, such as installments, on their path to credit worthiness."

PayPal credit card enters fray

PayPal has offered a Mastercard debit card for several years; now it's rolling out a Mastercard credit card that can be used on line or in-store, wherever Mastercard is accepted.

PayPal Credit, a revolving line of credit, has become a "customer favorite" way to pay for online purchases, PayPal said in a press release. The new physical credit card meets growing demand to extend this flexible financial option for in-store use.

To encourage consumers to take advantage of this new financing option, PayPal, in addition to the limited-time offer to finance travel transactions, said customers can continue to take advantage of its six-month promotional financing on PayPal purchases over $149.

The new offering joins the PayPal Cashback Mastercard as another physical option to use both online and in stores, plus it can be added to mobile wallets for tap to pay. Also issued by Synchrony Bank, the PayPal Cashback Mastercard offers 3 percent cashback on purchases checked out through PayPal and 1.5 percent cashback on other purchases made where Mastercard is accepted. PayPal also offers a buy now, pay later loan option.

"PayPal credit is one of our most popular products and customers have long been requesting the ability to use it on-the-go as they look for more choice and flexibility wherever they shop," said Scott Young, senior vice president, global head of consumer financial services at PayPal.

"As a long-time partner for PayPal's credit products," Bart Schaller, executive vice president and chief executive for digital products at Synchrony noted, we are committed to continually innovating our offerings and enhancing the customer experience. Bringing customers another physical card option to use for everyday purchases gives them greater purchasing power both on and offline."

Adam Granoff, executive vice president for global partnerships at Mastercard, added, "Bringing together Mastercard's global acceptance network with PayPal's trusted digital platform, this new offering extends PayPal credit with a physical card that empowers cardholders to shop seamlessly and confidently everywhere – whether they're booking summer travel or making everyday purchases."

Plans are to begin rolling out the new physical card in the coming weeks to U.S. customers, PayPal said in a press release. Eligible existing PayPal Credit customers will be notified about their card upgrades in the coming weeks as well.

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