PayPal and Google partner to integrate PayPal into Google Pay, which can be used to pay bills and more, starting later this year
Context & Ripple Effects
This is the second act of a PayPal–Google payments relationship that began with PayPal plugging into Android Pay in 2017 — but the scope has widened from checkout to utility. It also revives an ambition Google has chased since at least 2015, when it was building bill receive-and-pay functionality into Gmail and Inbox; folding PayPal in gives that bill-pay push a funded wallet with an existing user base rather than relying on raw card rails alone.
First-order effects
- Google Pay users gain PayPal as a payment option for bills and other purchases starting later this year, extending Google Pay beyond cards into a second major funding source.
- PayPal gets top-of-wallet placement inside Google's Android reach without having to win app installs — distribution it previously only had at merchant checkout via Android Pay.
Second-order effects
- Rival wallets face pressure to match multi-wallet interoperability: if Google Pay accepts PayPal balances, Apple Pay and Samsung Pay's card-only models look thinner by comparison, and banks partnering on later Google Pay products like the digital checking and savings accounts announced in 2020 will be competing alongside, not against, PayPal inside the same app.
Third-order effects
- If wallets keep absorbing third-party funding sources and adjacent services — PayPal here, P2P and ticketing in the July 2018 Google Pay expansion, bank accounts by 2020 — the wallet becomes an aggregation layer where payment networks compete for placement rather than end users, shifting leverage toward whoever controls the interface.
The trend: Mobile wallets are evolving from single-issuer card containers into open aggregation platforms that broker between rival payment networks, banks, and services.