Armed with $258 million in new funding from Google Ventures and TPG, Uber is making a big change to its payments structure that could help adoption and transactions internationally. Uber is making PayPal a payments option, leveraging a new mobile SDK for both Android and iOS that the payments giant is releasing in Q1.
With the PayPal integration and new SDK, Uber now allows you to add your PayPal account as a payments option the same way you would add a credit card to Uber. To add your PayPal account you simply enter in your email/password or phone number and pin, and you’ll be logged in. Via the new mobile SDK, the Uber app won’t redirect to PayPal the way it normally would in the sign-in process. You simply enter your credentials within the app. And you won’t have to login every time to use PayPal in Uber.
PayPal CEO David Marcus explained in an interview today that this new SDK is just one step further in providing developers and users with a frictionless payments experience.
Starting today, Uber riders in France, Germany, Italy, the Netherlands and the United States will have the flexibility to pay for their ride with PayPal. But according to CEO Travis Kalanick, this integration is really about giving international users the ability to use a payments method that doesn’t necessarily require you to have a credit card. Currently, Uber doesn’t work with bank accounts or non-credit card enabled debit cards. In the U.S., most users have credit cards but this isn’t the case in countries outside the U.S., he explains. Enabling PayPal was the simplest way to allow a universal payments method that is used across the globe by 140 million users.
We’re assuming the plan will be eventually expand the PayPal payments option to other international localities, including in India, Korea, Japan, Australia, China and other areas.
It’s also worth noting that Uber has been a longtime user of Braintree for payments processing, a company PayPal just acquired for $800 million.
There are other potential marketing and promotional opportunities that Uber (and PayPal) can benefit from, he adds, especially abroad. For now, until Nov. 28, any Uber user who pays for their ride with PayPal will receive $15 or €15 off (this excludes uberTAXI).
The fact that Uber is choosing to integrate PayPal as an option into its payments app is a big win for PayPal, which has been viewed in the past as being more of a clunky online payments experience. But with no redirects and re-engineered logins, perhaps this could help PayPal become more of a go-to payments platform for developers.