MoneyGram will enable PayPal's 55 million U.S. accountholders to withdraw funds from their accounts at MoneyGram locations.
It's the first phase of a broader program that will eventually include the ability for PayPal customers to load funds into their accounts at MoneyGram locations by the end of the year. Later this month, PayPal customers will also be able to load funds to their PayPal accounts at MoneyGram locations in Dallas, New York and San Francisco, with other locations to follow.
A new co-branded website, www.paypal.moneygram.com, provides instructions for loading funds to PayPal accounts. Consumers can also use the site to initiate cash withdrawals from the PayPal account, with funds available at MoneyGram locations 10 minutes later.
MoneyGram, which is diversifying its strategy in an attempt to gain share on Western Union, has been developing transaction services with PayPal for more than a year. PayPal also has a similar partnership with Outerwall, formerly Coinstar, to allow consumers to load funds from coin-counting machines. PayPal also supports cash loads from the PayPal My Cash Card and Green Dot MoneyPak, both of which are sold in retail stores.
"This new service will provide an even greater level of flexibility, convenience and value to existing PayPal users," says Mark Lavelle, senior vice president of strategy and business development at PayPal, in a press release.