PayPal deepened its investment in the world of brick and mortar with a MoneyGram partnership, announced yesterday, that allows PayPal account holders — all 120 million of them — to deposit and withdraw cash at one of MoneyGram’s 47,000 locations nationwide.
Sounds like a low-cost way to build a branch network and to connect with cash-dependent customers.
MoneyGram limits customers to withdrawing $200 a day and $500 a month. Additionally, no more than $500 can be deposited in any month. Transaction fees for MoneyGram’s are relatively high — $4.95 for withdrawals or deposits up to $200, and $5.95 for deposits or withdrawals above $200.
The $500 withdrawal cap limits the utility of MoneyGram to cash-dependent PayPal users. However, PayPal users can already load and withdraw cash with Green Dot’s MoneyPak cards and at CoinStar machines.
This move makes it easier for PayPal customers to avoid using a bank account or credit card to fund PayPal purchases. It also puts PayPal in the space occupied today by companies such as PayNearMe, which uses retail outlets to allow customers to pay bills using cash.
GoBank, a product of prepaid veteran Green Dot, also uses retail outlets to allow customers to fund accounts, and Bluebird, the joint offering from Walmart and American Express, likewise uses Walmart stores for transaction capabilities.
PayPal and these other financial offerings seem to be making the point that they don’t need the banks to provide banking services — and neither do their customers.