Paypal Holdings Inc (NASDAQ:PYPL) has joined forces with Skype to work on a new integrated payment feature that will allow Skype users to send payments across 22 countries.
The new integrated feature will allow Skype users to send money to friends and family and it is currently active in 22 countries. The feature is available in the latest version of the Skype mobile app. It allows a user to send cash directly to another user, thus supporting peer to peer payments instead of just allowing users to purchase products from businesses. Skype users can access the feature on the top bar in their conversation threads.
The new feature works a lot like the already existing PayPal Peer-to-peer payment system. This means users sending money via the new feature in Skype will not be subjected to a transaction charge. This will apply to those sending money from their U.S debit cards or from their PayPal balance. However, those making payments from their credit cards will be required to pay a charge of $0.30 and an additional charge of 3.4 percent of the amount transacted.
“PayPal’s deal with Microsoft represents the latest in a long list of partnerships recently announced by the digital payment specialist,” wrote Investopedia in a recent report.
The move is a competitive strategy for PayPal and Skype
Skype’s parent company Microsoft Corporation (NASDAQ:MSFT) and PayPal’s decision to join forces made a lot of sense especially from a competitive point of view. Skype has billions of downloads and it boasts of 300 active users every month. It was thus a good idea to take advantage of those numbers and the already existing platform to compete with the upcoming payments from rival firms such as Facebook Inc (NASDAQ:FB) and Apple Inc. (NASDAQ:AAPL).
The fact that the new Skype feature also focuses on peer to peer payments also highlights the fact that Skype and PayPal are looking to cash in on payments between individuals. The feature is currently available in 22 countries, mostly in the European region. It is not clear whether the two firms will expand the feature to other countries anytime soon.
PayPal stock closed the latest trading session on Thursday at $58.42.