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Shift4 Payments has expanded its relationship with PayPal to offer that digital payment pioneer’s payment method as an option at checkout.
Allentown, Pennsylvania-based integrated payments company Shift4 signed a partnership agreement with San Jose-based PayPal during the fourth quarter, Shift4 CEO Jared Isaacman said during the company’s fourth-quarter earnings call Tuesday.
Shift4 had a pre-existing agreement with PayPal through an e-commerce company it acquired in November 2020, and the partnership established late last year expands that to the rest of Shift4’s business, said Shift4 Chief Strategy Officer Taylor Lauber.
The agreement means Shift4 will enable PayPal checkout capabilities, including PayPal’s buy now, pay later offering and its peer-to-peer payment brand Venmo, for its corporate clients.
“We will also more prominently promote PayPal as a checkout option to Shift4Shop merchants and QR pay customers, in return for an expanded revenue share wherever PayPal is selected at checkout,” Isaacman said during the call with analysts. Shift4Shop is the company’s e-commerce software platform.
Isaacman noted the company “may not be directly settling funds for those transactions, the impact of which is that our gross revenue and gross revenue less network fees will essentially be the same.”
As the checkout arena becomes more competitive, PayPal has sought to improve its checkout technology in recent months by speeding up the process for consumers and reducing reliance on passwords, PayPal exiting CEO, Dan Schulman, said last year. The company has also worked to get more consumers to use its buy now, pay later services. A spokesperson for PayPal didn’t immediately respond to requests for comment.
Lauber, who’s also the company’s president, declined to comment Tuesday on the date the agreement was signed, but said in an email the partnership “was a long time in the making.” He touted PayPal’s long-time presence in the e-commerce market, which Shift4 is targeting for further growth, and said Shift4 is a “unique partner” for PayPal considering the company’s presence in restaurants, hotels and stadiums.
As Shift4 plots international growth, its $525 million acquisition of Israeli financial services firm Finaro is taking longer than expected.
The acquisition, which was announced last March, was expected to close early in the first quarter of this year, Isaacman said in November. But Lauber said Tuesday the company believes the closing is now likely to take place during the second quarter.
That acquisition has taken more time due to European regulatory approval and a Russian oligarch’s ownership stake in Finaro.
“The opportunity of owning a bank in Europe is really quite high,” Lauber said Tuesday. “The opportunity cost of that is the fact that these regulatory approvals can take up to 18 months.”
The Malta Financial Services Authority is among the handful of European bank regulators reviewing the transaction, Lauber has said previously.
The company reported fourth-quarter net income of $38.5 million, compared to a $13.7 million net loss in the year-earlier quarter, Shift4 said Tuesday in its shareholder letter. Meanwhile, fourth-quarter gross revenue jumped 35% to $537.7 million.
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