Google and PayPal announced a new partnership allowing users of Android Pay to make payments with their smartphones using their PayPal accounts at the point of sale, according Telecompaper. The service will start in the US, at retailers such as Walgreens and Dunkin' Donuts, and expand gradually to more outlets, PayPal said. Initially, users will be able to pay using their PayPal balance and over the coming months the company will add the ability to use cards stored with PayPal, enabled by its tokenization partnerships with major card networks. 
PayPal said the agreement is an extension of its existing partnership with Google to offer PayPal as a payment option on the Google Play store. The deal should help Google increase the penetration of Android Pay, which to date has required users to link to a bank or credit card in order to use the mobile payment service. The PayPal deal follows news last week that Android Pay users can also start integrating the service with some mobile banking apps.