Alphabet’s (GOOGL - Free Report) Google division recently announced a unique integration with PayPal (PYPL - Free Report) by which Google Pay users can access their PayPal account as a check-out option.
The latest integration enables Google Pay users to switch between their saved payments methods, now including PayPal, apart from debit and credit cards and other options.
Moreover, users can access PayPal benefits including Return Shipping and Purchase Protection capabilities which in turn ensure hassle-free and secure online payment experience.
The extended Google Pay-PayPal partnership is expected to strengthen the presence of both the companies in the digital payment market, currently projected to hit $7.64 trillion by 2024 from approximately $3.42 trillion in 2018, per ResearchAndMarkets.
Per ‘World Payments Report 2018’ by Capgemini and BNP Paribus, the digital payment volume is expected to reach 876.4 billion by 2021. In order to reap benefits from this expanding market, the tech giants are coming up with innovative applications.
The strengthening relation between Google and Paypal also improves their competitive position against tech-giants like Apple (AAPL - Free Report) , Amazon (AMZN - Free Report) , Samsung and Square (SQ - Free Report) .
Year-to-Date Price Performance
Win-Win for Both Google Pay and PayPal
Google allows PayPal account holders to make payments without signing in to their PayPal accounts which in turn makes the payment process a lot easier and quicker. Once the PayPal account is linked with Google Pay, customers can pay their bills or make peer-to-peer transfers across the entire Google ecosystem.
Apart from Google, PayPal’s expanding partner base includes Facebook, Visa and Mastercard, which will continue to aid it in enhancing payment services.
Given the widescale adoption of Android smartphones, expanding international presence and partner base, Google Pay is expected to gain a competitive edge over its fellow peers in the digital payments market.
The latest development on Google Pay and PayPal partnership highlights the ongoing hybrid ecosystem in payment methods, wherein companies are reluctant to miss out on business owing to rigidity in check-out options.
The companies are integrating their respective payment portals to provide seamless online experience to end-users. These initiatives are expected to bolster growth of transactional revenues and strengthen partner base.
Apple, Samsung, Amazon & Square Trying to Foil Google’s Plan
It would be foolish to ignore the initiatives undertaken by tech giants like Apple, Amazon, Samsung and Square in this space.
Apple Pay is performing well in the market on increasing clientele and partner base, now including retailers like Taco Bell and Target. It was recently launched in the Netherlands, and is reportedly set to foray in Slovakia as early as Jun 26.
Further, Amazon is offering customer-friendly offers on its payment app via its online shopping platform. The company recently announced significant investment in India in a bid to expand usage of Amazon Pay in the country, touted to be an emerging market for digital payments services.
Samsung Pay is also gaining traction by expanding globally. Samsung introduced its payment app in South Africa this March. It already exists in Brazil, India, UAE and France among other countries. The company also rolled out Samsung Pay on its select wearables, including Samsung Galaxy Watches to allow seamless online transactions.
Moreover, Square seems to be on an impressive run with strong adoption of its payments and POS services including Square Terminal, Square Stand, Instant Deposits, Square Invoices, Cash Card, Square Register and Caviar. The company recently rolled out third-party integrations to augment seller base of Square for Restaurants service.
Currently, PayPal and Square carry a Zacks Rank #2 (Buy) while Alphabet, Apple and Amazon carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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