Digital payments solutions company PayPal Holdings Inc has reportedly collaborated with Brazil's largest private sector bank, Itaú Unibanco Holding SA, in a bid to offer its online digital payment services to the bank's card clients. As per trusted sources, the company aims to leverage this partnership to raise its digital payment platform’s acceptance and analyze the bank’s client profile before accepting or rejecting a transaction.

Sources familiar with the development claim that the agreement specifies that PayPal will offer its online digital accounts to card holders of Itaú Unibanco as well as to its merchants that use the bank’s card processing unit, Rede. Reportedly, about 300,000 merchants currently use PayPal’s services in the nation.

According to Reuters, Paula Paschoal, PayPal's General-Director in Brazil has reportedly stated that the company is focused on extending its customer base by 1 million from its current 3.8 million users in Brazil over the next two years. Itaú Unibanco is PayPal's first partner in Brazil and the company welcomes new agreements with other financial institutions in the country, Paschoal added.

If sources familiar with the matter are to be trusted, the announcement highlights PayPal’s strategy of collaboration and acquisitions to stay ahead of its competitors in the increasingly competitive digital payments industry. Reportedly, PayPal announced in April to have teamed up with British investment bank and financial services company, Barclays.

Worldwide, banks are reportedly forming partnerships with large tech companies rather than competing with them amidst rising concerns that tech firms can replace their services in the payments market.

While speaking on the partnership, Executive Director of Itaú Unibanco, Marcelo Kope was reportedly quoted stating that the bank chose to collaborate with PayPal instead building its own digital payment services given that PayPal’s expertise in online payment solutions has been tested and applied on a global scale.