PayPal has announced an agreement with the Microsoft-owned Skype which will enable users of the communication software to send money to each other. The deal will allow PayPal to extend its user base as Skype has been downloaded more than a billion times so far. Currently the number of monthly active users on Skype is 300 million.
In order to send money to other users via PayPal, the latest Skype mobile app version will be required. The ‘Send Money’ feature is an add-in and to use it when engaged in a conversation with others, all that users need to do is key in the amount of money that they want to send and then confirm the payment before hitting send in order to finalize the transaction.
Skype’s ‘Send Money’ feature cannot, however, be used by business in the payment of goods and services but is restricted to family and friends. The rates that users will be charged are the same as those on the PayPal app. This means that no charges are incurred to send money when a debit card or a PayPal balance is used. When a credit card is used, however, the cost of sending is a fee of 3.4% of the total transaction amount and an additional charge of $0.30.
Initially, PayPal’s ‘Send Money’ feature on Skype will be limited to 22 countries. These markets include the United States, the United Kingdom, Austria, Spain, Canada, Estonia, Cyprus, France, Finland, Germany, Ireland, Greece, Italy, Luxembourg, Latvia, Malta, Portugal, the Netherlands, San Marino, Slovenia,Slovakia, and Belgium.
Series of partnerships
This is the second time Skype is offering P2P payments via PayPal as a similar deal had been enacted ten years ago when PayPal was still a unit of eBay and Skype was also owned by eBay. PayPal was spun off from eBay in 2015 while eBay sold Skype to Microsoft in 2011. In the first time that Skype offered a money-sending service via PayPal, the feature was available on the desktop application.
PayPal’s partnership with Skype is the most recent deal the payments platform has inked as it moves to place itself in a better position against emerging threats such as Apple Pay and Zelle, a Venmo-like service introduced by banks in the United States. This has seen PayPal partner with rivals which include Visa, MasterCard, Apple Pay, Android Pay, Samsung Pay, Baidu, Citi and JPMorgan Chase among others.