This story was updated with more information on Feb. 11.
Redeeming airline miles for cash just got a little easier.
Points.com, a subsidiary of Toronto-based loyalty rewards management company Points International Ltd., and PayPal Inc. on Feb. 9 announced a partnership to enable Points.com members to redeem specific airline miles for funds they can deposit into their PayPal account.
Representatives from PayPal were unable to comment on the partnership by PaymentsSource deadline.
Through the partnership, members of Points.com may redeem their American Airlines, US Airways and Groupe Aeroplan miles earned from the airlines and their co-branded cards for funds deposited into a PayPal account, Points.com said in a recent news release.
Consumers pay a fee to convert miles into monetary value because each Points.com partner pays a trading fee assessed by the reward program from where the miles or points are transferred, a Points.com spokesperson tells PaymentsSource. This fee is a set industry standard fee and varies based on each partner, she adds.
Points.com members may then spend the funds at any merchant that accepts PayPal, deposit the value into a bank account linked to PayPal, or send the funds to family members and friends. Members who do not have a PayPal account have 20 days from the redemption to open one.
Additionally, United Online Inc., MyPoints.com and Starwood Hotels & Resorts Worldwide Inc. StarChoice members also may convert rewards points to PayPal deposits.
The partnership is beneficial for Points.com, PayPal and consumers because everyone receives something of value, Zil Bareisis, a senior analyst with consulting firm Celent, tells PaymentsSource.
“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,” Bareisis explains.
Merchants issuing points that do not accept PayPal payments, however, may prefer to see consumers redeem points inside the system for hotels or other flights instead of converting them into cash value, Bareisis contends.
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