Dive Brief:

• PayPal announced new capabilities in alignment with Facebook Messenger, including expanded availability of PayPal as a purchase option across Facebook’s commerce experiences for U.S. consumers.
• Other new features include making it easier for customers to link their PayPal accounts to Facebook and Messenger at PayPal checkout, and allowing U.S. consumers to receive notifications via Messenger, like receipts for PayPal transactions.
• The announcement comes about a month after Facebook Messenger head David Marcus acknowledged that it started beta testing to accepting payments through Messenger chatbots, meaning merchants ultimately could allow their customer to pay chatbots directly, rather than going off of Messenger to pay.

Dive Insight:

More than a year ago, PayPal and Facebook looked increasingly like enemies, with Facebook enabling its own peer-to-peer payments capability shortly after the social networking giant was rumored to be a potential PayPal acquirer. That move came about a year after Marcus left his job as president of PayPal to join Facebook, which probably initiated some bad blood between the companies. However, by late last year PayPal's Braintree unit forged a deal with Facebook to enable payments for Uber car services through Messenger.

Now the two companies have clearly friended each other, and PayPal has much to gain from creating as tight a bond as possible. This week's announcements go further than the Braintree deal by actually making PayPal a payment option within Facebook and Messenger: Facebook has partnerships with other companies in the payment space, including Visa, MasterCard and Stripe, so it's not an exclusive arrangement, but PayPal still gets exposure to Messenger's more than one billion users.

And while purchasing through chatbots is not yet a common occurrence, retailers and product brands of all kinds have been investing more in the notion of late, with eBay last week becoming one of the latest. Facebook has been aggressive about using Messenger to play host to thousands of new chatbots. The pieces seem to be falling to place for the rise of conversation commerce. As this concept continues to progress, and native chatbot payments move from beta test to commercial reality, PayPal should be in the right place at the right time to take advantage of that evolution.

Finding new ways to grow its user base is especially critical to PayPal now, as it faces more competition from the likes of Apple Pay, Android Pay, Masterpass, Visa Checkout and other emerging alternative payment platforms. Even retailers like Wal-Mart and CVS who are launching their own branded payment apps are a threat (unless of course PayPal can become a white-label enabler of such apps.) PayPal needs to continue to look at new ways to prove and distinguish the value of its solution. Fortunately, it now has a friend that can help.