PayPal headquarters.

PayPal  (PYPL - Get Report)  agreed to a partnership with Citigroup  (C - Get Report)  and Fidelity National Information Services (FIS - Get Report)  that will expand customers' payment options utilizing its platform. 

Shares of the San Jose, Calif.-based company were up 0.4% to $39.71 on Thursday as PayPal reported its first deal with a major bank, Citigroup, to tokenize cards for use during point-of-sale, leveraging its earlier deals this year with Visa (V - Get Report)  and MasterCard (MA - Get Report) .  

PayPal is teaming with companies that "share a common vision to make payments simple, safe and convenient regardless if people are shopping online, in-app or in-store," Gary Marino, PayPal chief commercial officer, said in a statement. 

With over 200 million customer accounts, PayPal can tap into Citi's markets to reach a larger audience --one of its strategies to increase its customer base. 

PayPal CFO John Rainey said at conference in November that the company could have "stuck with our historical approach" of emphasizing electronic bank-account transactions, but "that wouldn't have allowed us to capture the huge addressable market." If the company wanted to grow its platform by "hundreds of millions of customers" then it had to give customers choices, he said.

In July, PayPal announced a deal with Visa, saying that it would stop pushing customers to pull money directly from their checking accounts rather than credit or debit cards. It also inked a deal with MasterCard in September promising the same action. This was largely seen as a move to quell competition between the companies over how customers used their accounts.

Assisting with this strategy is financial services technology firm FIS, that will allow "a more seamless way for bank issuers to drive more digital spend with their customers through PayPal accounts," the companies said. 

"By enabling the bank branding within the checkout process with PayPal through account-linking, a financial institution can remind its customers of the ease with which they can shop, and make them more likely to use that particular account and to increase spend," Anthony Jabbour, FIS banking & payments chief operating officer, said in a statement. 

PayPal had been expected to form additional partnerships with credit card issuers following its deals with payment networks Visa and Mastercard, said Keefe, Bruyette & Woods analyst Sanjay Sakhrani.

"We expect these agreements to be the start and to drive incremental value for PayPal users, increasing engagement with PayPal's offerings and driving higher total payment volume," Sakhrani wrote in a note to clients.

KBW analysts rate PayPal as an outperform with a price target of $48. 

Despite these partnerships, Rainey said that the biggest competitor for the firm is "still cash and check." 

"Eight-five percent of the world's commerce still takes place in cash and check," he said. "And that's the biggest impediment that we have to achieving the opportunity that we have in front of us."

PayPal's shares are up almost 10% year-to-date. 

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