A little more than a year after Alex Chriss became PayPal’s president and CEO, the ecommerce payments giant has launched a major assault on in-store spending that includes major consumer incentives, plans to hook into Apple’s iPhone NFC chip, and a big-budget advertising campaign featuring comedian Will Ferrell. It all comes under the banner, “PayPal Everywhere.”
A few days after the company announced the PayPal Everywhere concept, Chriss characterized it as a strategy to dramatically expand the total addressable market that PayPal can process.
“If you think about PayPal, it is a business that 80% of Americans have used over the last few years. But it’s almost all online, all through ecommerce,” said Chriss in a Goldman Sachs’ fireside chat. “We wanted to take the brand that people love — the product that people love and know for security and safety — and add value proposition and rewards.”
He added: “This is about creating ‘habituation'” — making PayPal the payment of choice all around.
In the first shot in PayPal’s biggest U.S. ad campaign ever, Will Ferrell goes into paroxysms of joy after finding out he can pay with PayPal both in-store and online.
In mid-August, when Apple announced its intention to voluntarily open up developer access to its near-field communication (NFC) chip for inclusion in third-party apps in the U.S. and elsewhere, Keefe, Bruyette & Woods analyst Sanjay Sakhrani homed in directly on the implications for PayPal in a client report:
“We think there is a path for PayPal to be a meaningful beneficiary as it could finally give access to in-person point of sale commerce, something PayPal has desired for a long time … without much success.”
Sakhrani predicted that PayPal could boost incentives to get consumers to choose it over Apple Pay and other instruments at physical checkout. The ability to capture in-store volume “could be a huge win for PayPal,” Sakhrani wrote.
Consumers Just Spend Money — Everywhere
Much has now come to pass along the very lines that Sakhrani predicted. Chriss elaborated on the initial announcement in the Goldman Sachs interview and payments analysts contacted by The Financial Brand discussed the potential impact on competition for in-store payments.
In the commercial PayPal takes Will Ferrell everywhere, including this mockup of the West’s Monument Valley. The spot kicks off a campaign that will feature out-of-home, digital media, streaming and radio, podcasts, influencers, and a social media.
Underlying the “everywhere” idea is Chriss’ belief that consumers aren’t thinking much about the differences between payment types.
“People are starting to think about what is the wallet that I want to use, what is the mechanism that I want to use to be able to just move money,” said Chriss. He said that the company’s intention is to turn its services into “an omnichannel solution.” (View the Will Ferrell commercial.)
Read more: Affirm Sees Profitability in 2025 as its BNPL Products Gain Traction
Unpacking PayPal’s Plans for People Paying Everywhere
Since his arrival, Chriss stressed monetization of the products and services PayPal already has on the shelf, in addition to introducing new innovations. A major push to build up its Venmo operation is one example. Chriss has also discussed ongoing discussions with major merchants to find ways for PayPal to handle greater portions of their total payments volume.
In recent months, PayPal has also been working on ways to persuade companies to funnel money currently used for advertising into coupons and rewards targeted to specific customers. Chriss has said this is an alternative to “spray and pray advertising. It is not targeted. It’s not all that effective, and the costs are going up.” [Deep Dive: Will Banks and Fintechs Become Retail Media Networks?]
During the company’s late July earnings call, Chriss said, “We are building a platform that delivers far more value to our customers and partners than the individual products we offer.” Chriss has been promoting the idea that PayPal has relationships on both the merchant and consumer side that it strives to tie together.
The broad outline of PayPal Everywhere reflects the intent to make more of the parts the company has established, with connective tissue to stimulate usage.
One is enhanced rewards that enable consumers to receive 5% cashback on up to $1,000 spent at point of sale in one of five selected categories PayPal Debit Mastercard — they choose the category every month.
The categories are grocery, gas, restaurants, clothing and health and beauty. In the analyst interview Chriss said gas and groceries were the most common choices in pilots.
“These are everyday purchases that people need to put more money back in their pocket and there are things that you would never have though of using PayPal for in the past,” said Chriss. [Deep Dive: Former PayPal Leader Dan Schulman on the Future of Banking: Digital, Seamless and Consolidated]
Related to that is PayPal’s decision to let customers “stack” additional cashback offers on top of the 5% in the chosen category both in-store and online. The additional offers come from national brands making them available through the PayPal app.
The company has introduced an auto-reload feature that enables their PayPal balance account to draw on outside banking accounts for a top-off to a pre-selected level. It has also streamlined signup for the PayPal balance account, the digital debit card and account and routing numbers for direct deposit. In addition, adding PayPal debit to Apple Wallet has been simplified. (The card can also be loaded onto Google Wallet.)
This ties into Chriss’ point during the fireside chat that the company won’t be relying solely on access to the NFC chip to make things work.
“NFC is one ‘how’,” he explained. “It is not the only how, but where it’s available, we will move quickly to be able to offer it.”
Payments Analysts Have Mixed Views on PayPal Everywhere’s Potential
One of the strengths of the in-store payments experience for both merchants and payment companies is that relatively few people abandon live shopping carts, points out Richard Crone, head of Crone Consulting, payments advisors. It’s also the strongest point of merchant influence, versus ecommerce, he says, where any delay to the process can lead to cart abandonment and no sale. This adds to the appeal for PayPal to attempt a major beachhead in stores.
Making it possible to grant 5% cashback and to allow stacking of other offers on top of that can enable consumers to realize as much as 15% cashback on certain categories of spending, Crone points out.
“It’s going to be hard for banks to compete with that,” says Crone. In part, this is because the first thrust of this for PayPal is based on a debit card with rewards. In recent years consumer preference for debit cards over credit cards has been increasing, Crone notes. Banks, he says, have strong promotional programs and incentives built around their credit cards but many have comparatively weak debit card programs.
Drew Edmond, associate partner at payment consultancy Glenbrook Partners, sees PayPal Everywhere as a marketing campaign as much as a stronger combining of capabilities that mostly already existed. Note, too, that Apple‘s opening of the NFC chip is just beginning. He sees a plus for PayPal in tying in its PayPal Honey merchant-based rewards operation.
“This is more messaging than it is product development,” says Edmond.
PayPal’s efforts won’t just impact the banking business on the payments side, says Emily Rueth, managing director and founder at Vicuse Payments Advisors LLC.
“PayPal Everywhere is another way fintech is disintermediating traditional banks,” says Rueth. “While 5% cashback rewards and stackable rewards are not new, the ability for users to auto-reload funds ensures that a balance on their PayPal account is always present and available for purchasing. This is a smart move.”
And there is also a payment effect, of course. “It drives usage of the card or app for purchases,” says Rueth. “This shifts the user away from choosing their traditional bank’s debit card for every purchase to now using PayPal debit. Even if that is only on select purchases [such as one of the five categories] that’s interchange and customer loyalty that’s being directed away from the bank or credit union.”
Much may hinge on how long PayPal maintains such generous cashback policies. Consumers have been moving to cashback recently, according to research by J.D. Power. For many banks, says Rueth, it would be difficult to keep up a competitive set of offers.
Richard Crone sees the portfolio of PayPal services available through its app to be something most banks can’t match. PayPal provides debit service, a credit card through a bank partnership, buy now, pay later and installment plans and more.
“For banks to compete, they need an all-in-one account that allows consumers to switch seamlessly between credit, debit, BNPL and prepaid within a digital wallet,” says Crone. “Without this, they’re going to lose market share as consumers shift to lower-cost, fee-free options.”
Edmond points out that a growing number of traditional credit card issuers have been adding buy now, pay later options as part of their offerings.
No bank has a competitive setup like that now, though Crone and other analysts see some potential in developments like the Visa Flexible Credential program, unveiled in May. That may also be an avenue for wider introduction of consumer-side FedNow, Real-Time Payment network and pay-by-bank services, he suggests.
Rueth doesn’t see the “all-in-one” factor as much of a threat to banks. For PayPal, she says, stronger linking of BNPL to debit would facilitate competition with Affirm and with traditional debit card programs.
Read more: When Will Mobile Banking Finally Kill the Plastic Credit Card?