The loyalty rewards management company Points International Ltd. and PayPal Inc. have started a partnership that lets Points.com members redeem airline miles for funds they can deposit into their PayPal account.
Members of Points.com may redeem their American Airlines, US Airways and Group Aeroplan miles earned from the airlines and their cobranded cards for funds deposited into a PayPal account. Members who do not have a PayPal account have 20 days from the redemption to open one.
Consumers will have to pay a fee to convert miles into money as each Points.com partner pays a trading fee assessed by the reward program from where the miles and points are transferred, a spokeswoman for Points.com said. This is a set, industry-standard fee and varies based on each partner, she said.
United Online Inc., MyPoints.com and Starwood Hotels & Resorts Worldwide Inc. StarChoice members also can convert rewards points to PayPal deposits.
"For consumers with loyalty points, it is a way to essentially cash out and widely increase acceptance of their points. And for PayPal, it's a way to grow their account balances," said Zilvinas Bareisis, a senior analyst with Celent.
Merchants that issue points but do not accept PayPal payments, however, may prefer to see consumers redeem points for airline flights and hotel stays instead of converting them into cash value, Bareisis said.
The deal was announced Feb. 9.
Points International is based in Toronto. PayPal, a unit of eBay Inc., is based in San Jose, Calif.
