First Data recently announced an agreement with PayPal ® that allows debit cardholders in the STAR® Network to link their debit cards to PayPal accounts right from their financial institution’s online banking site. This is an industry first, and we’re excited to be working with PayPal to help consumers feel more comfortable when they shop online.
Why is this innovative? Consumers enjoy the convenience of having their shipping and billing information automatically completed while shopping online and the security of knowing their account information isn’t exposed to merchants for each purchase. Consumers can fund their PayPal accounts using their STAR debit cards and debit card usage is growing increasingly popular with consumers.
According to Aité Group , 39 percent of Gen Y'ers use their debit card at least 15 times each month, but PayPal accounts are most frequently funded via ACH, which results in a per-transaction expense for the financial institution.
By signing up for the STAR Online Partner program, financial institutions will make it easier for consumers to use the payment and funding method of their choice. Institutions will receive interchange revenue from PayPal transactions rather than incurring ACH fees.
This program could result in several advantages for the institution:
- Increased revenue opportunity by converting ACH expenses into debit revenue
- Reduced back office costs associated with chargebacks via PayPal’s dispute resolution center
- Improved customer service with expanded debit capabilities on the financial institution’s Web site
- Reinforcement of financial institution brand relationship in every online transaction
STAR cardholders will see the financial institution’s brand every time they shop using PayPal and will enjoy the peace of mind that comes with knowing that by using PayPal, their debit card information will not be shared with the online merchant.