Here's why the PayPal-Facebook deal makes so much sense (FB, PYPL)

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October 23, 2017 4:50 PM

As a result of the partnership, PayPal will be integrated into Messenger as a funding option so that users can send and receive money on the platform

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PayPal is forging a deeper partnership with Facebook, according to an announcement from the firmscovered byTechCrunch.

As a result of the partnership, PayPal will be integrated into Messenger as a funding option so that users can send and receive money on the platform.

PayPal is also launching a customer service chatbot on the platform. The move expands on an existing partnership that enables consumers to use PayPal to shop merchants' sites using chatbots.

The move comes in the wake of a strong quarter for PayPal. Last Thursday, the firm announced a strong Q3 2017, in which it posted 218 million new customers that spent $114 billion in total payment volume (TPV). Importantly, the firm’s 29% TPV growth is outpacing its 14% annual customer growth, which means that the firm's growing not just by scale, but also by engagement, as evidenced by an uptick in the transactions per active account in the quarter. None of these accomplishments are surprising — they build on a series of solid quarters for the firm — but they’re indicative that PayPal's strategy is working.

The Facebook partnership could help PayPal double down that effective strategy by pursuing high-growth areas. In the past two years, PayPal has signed over 18 partnerships with firms across the spectrum, indicating a push to work with its peers, rather than against them, as it tries to become omnipresent in consumers’ financial lives. That’s led to substantial gains, and the Facebook offering could be no exception. Here’s why:

PayPal is smart to double down on mobile.
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And it’s breaking into messaging at an opportune time.
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Dan Van Dyke, senior research analyst for BI Intelligence, Business Insider's premium research service has written a detailed report that explores the digital payments ecosystem today, its growth drivers, and where the industry is headed. The report also:

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