Business

Barclays and Paypal to join forces on accounts tie-up

Barclays will today announce a new deal with Paypal which will allow customers to link their accounts with the two firms, amid a growing battle to retain customer relationships as competition with fintechs hots up.

Consumers and small businesses in the UK and US will be able to manage their Paypal account via Barclays.

The partnership is still in its very early stages, paving the way for much closer integration and new products in the future.

Read more: Barclays sets up venture capital unit

The firms will explore linking Barclays reward points to payments in the US, while British small businesses will be able to integrate their Paypal data into the online platform offered by Barclays.

The unusual tie-up is a first for a major British bank, joining forces with a US fintech giant which has already moved into offering credit products which were traditionally the preserve of the banks.

The move could also open up the possibility of new customer account wins for the firms, although could risk cannibalising income if revenue share models are part of future deals.

Read more: Activist Ed Bramson reportedly approaches investors over Barclays shake-up

Ashok Vaswani, Barclays UKs chief executive, said: “Barclays is becoming a digital company and I believe this strategic partnership with PayPal will provide the first of many new developments in which we join up with partners to enhance digital journeys.”

Big incumbent banks such as Barclays are coming under slowly increasing pressure to increase their digital spending in order to keep up with smaller fintech firms which can command smaller resources but have more agile business models.

Read more: Barclays boss Jes Staley fined for whistleblower scandal

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