Uber cab service users can now pay for their rides using PayPal.

Travis Kalanick, Uber's CEO, explains that its partnership with PayPal is aimed to expand its on-demand business to newer locations. Kalanick has announced the acceptance of PayPal payment for various cities globally. PayPal users will now have an added service available from the company.

PayPal confirmed that its payment service for Uber customers has now started in Germany, Italy, France, the Netherlands and the U.S. The company also plans to extend the service in markets such as Dubai and Kuala Lumpur soon.

Till now, customers using Uber on-demand cab service have to make payments for the rides by credit cards. However, now customers can also opt to pay for the services via PayPal.

Mobile phone usage has increased rapidly in the recent years and recent research indicates that mobile payments in the U.S. may jump to $90 billion in 2017 from $20.5 billion in this year. However, PayPal is not the only mobile payment service provider in the U.S. and may still face stiff competition from companies such as Square.

PayPal has gained a lot of popularity and has now become one of the key internet payment systems available online. However, the company has been slightly slow when it comes to the mobile payment front.

PayPal has been previously criticized for not having adequate software to allow users to make a swift and speedy payment using a mobile device. Understanding the requirement of users and work well with mobile services, the company has now developed functions that allow users to pay for services without leaving a merchant's app.

"Our experiences inside mobile apps were not meeting the bar a year ago," said David Marcus, CEO of PayPal. "It's important to be where disruption occurs. You want to partner with the companies creating an amazing consumer experience."

Partnership with Uber may be PayPal's initial step forward in the mobile payment system but the company may soon expand its reach in other areas as well.

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