The news: PayPal will offer free tax filing to PayPal debit cardholders through a partnership with fintech april, per a press release.

Sizing the competition: Traditional issuers like Chase, Citi, and Wells Fargo have offered tax filing-related promotions to their credit cardholders, most often TurboTax discounts. PayPal’s partnership with april brings its fintech perks beyond incumbents’ typical discount offerings. 

PayPal can also use this promotion as an opportunity to cross-sell different financial products like enrolling in direct deposit to put their federal tax refund into a PayPal Balance or high-yield Savings account.

Why this could work: PayPal’s commitment to boosting its debt product is likely a play to capture Gen Z, which favors debit-based payments: Over 74% of Gen Zers used their debit cards for a purchase within the past 30 days as of November 2023, compared versus 67% of US consumers overall, per the Federal Reserve Bank of Atlanta. 

Free tax filing from a debit card could move the needle for twenty-somethings who may be unable to get a credit card because of a thin credit history or are trying to avoid revolving debt. 

Implications for payment providers: Tax-filing promotions may soon become less compelling under the agentic payment revolution. 

Intuit’s multiyear strategic partnership with OpenAI suggests that consumers may come to rely on AI platforms like ChatGPT for filing their taxes and other financial housekeeping. Promotions may need to be linked to consumers’ AI platforms of choice to hold currency with shoppers.