PayPal Launches Super App: Payments, Crypto & More

PayPal Introduces its Comprehensive “Super App”

For a considerable period, PayPal has discussed its ambitions for a “super app.” Recently, the company informed investors that its forthcoming digital wallet and payments application had received approval for launch. Today marks the official introduction of the app’s initial iteration, integrating a suite of financial instruments, including direct deposit, bill payment, a digital wallet, peer-to-peer transactions, shopping features, cryptocurrency options, and more.

Alongside this launch, PayPal is announcing a collaboration with Synchrony Bank to introduce its new high-yield savings account, PayPal Savings.

A Shift in PayPal’s Functionality

These developments represent a transition for PayPal, moving it from primarily a payments processor with supplementary features to a more complete financial application. While PayPal does not intend to operate as a traditional “bank,” the new app provides a range of features competitive with neobanks, such as Chime and Varo.

These features include support for paycheck Direct Deposits via PayPal’s banking partners, offering access to funds two days earlier, alongside bill payment capabilities.

Enhanced Features and Competitive Advantages

The ability to access funds sooner is a significant advantage, attracting users who might otherwise choose digital banking applications over conventional banks. Customers can utilize their PayPal funds for everyday expenses, including bill payments, savings, and shopping.

The improved bill payment functionality allows users to monitor, view, and settle invoices from a vast network of companies – encompassing utilities, television and internet providers, insurance companies, credit card issuers, and mobile phone services – according to PayPal.

Expanded Bill Payment Network

Previously offering access to a limited number of billers, the service now supports approximately 17,000 billers. An enhanced, intelligent search function assists users in discovering billers, while reminders and scheduled payments streamline regular bill management. Payments can be sourced from any eligible funding source linked to the user’s PayPal account.

Introducing PayPal Savings

Through its partnership with Synchrony Bank, PayPal Savings will offer a high-yield savings account with a 0.40% Annual Percentage Yield (APY). This rate surpasses the national average of 0.06%.

However, it remains lower than rates offered by leading digital banking competitors like Chime (0.50%), Varo (starting at 0.20%, with potential for 3.00% APY), Marcus (0.50%), Ally (0.50%), and ONE (1.00% or 3.00% on Auto-Save transactions).

PayPal believes its comprehensive suite of offerings will provide a competitive advantage, even with a slightly lower APY.

App Redesign and New Features

The app has undergone a reorganization to accommodate the new and forthcoming features. A personalized dashboard provides an overview of the user’s account.

The wallet tab enables management of Direct Deposits and connection of funding sources, including bank accounts and debit/credit cards, as well as enrollment in PayPal’s debit, credit, and cash cards.

A finance tab grants access to the high-yield savings account and existing cryptocurrency capabilities, allowing users to buy, sell, and hold Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.

Payments, Messaging, and Shopping Hub

The payments tab retains PayPal’s core functionality, including peer-to-peer payments, international remittances, charitable donations, bill pay, and a two-way messaging feature for payment requests or acknowledgments. This addition aligns PayPal more closely with its subsidiary, Venmo.

Messaging is integrated with PayPal’s new Shopping hub, which leverages the company’s 2019 acquisition of Honey. Honey’s features, including personalized deals and exclusive rewards, are now integrated into the PayPal mobile experience.

Honey Integration and Personalized Deals

Users can browse discounts and offers within the app, shop through the in-app browser, and save deals for future use. A loyalty program allows users to earn cashback and PayPal shopping credit. PayPal anticipates that these personalized deals will become more refined over time.

“We’ll employ AI and machine learning to identify the shopping deals most appealing to customers and continually enhance them as the product gains usage,” explains Julian King, PayPal SVP of Consumer.

Generosity Network and Future Initiatives

The updated app also includes PayPal’s crowdsourced fundraising platform, the Generosity Network, launched late last year. This platform provides tools for individuals to raise funds for themselves, others, or organizations. The network is expanding internationally, starting with Germany and the U.K.

Looking ahead, PayPal plans to enter the investment space, competing with apps like Robinhood, offering the ability to buy stocks, fractional shares, and ETFs.

Future updates will include support for QR code payments offline and tools for in-store savings.

Rollout and Availability

The updated app is being released in the U.S. in phases, completing over the coming weeks. PayPal Savings will become available in the U.S. in the “coming months,” along with select shopping and rewards features.