NEW YORK, United States — MasterCard Inc said it signed a deal with PayPal Holdings Inc that will allow customers to use PayPal's payment services in stores.

PayPal's partnership with MasterCard follows a similar deal with Visa Inc in July as the company looks to expand its payments network.

The partnership with MasterCard was first reported by the Wall Street Journal.

PayPal will allow users to select a credit or debit card as the default payment method and share data on transactions made through MasterCard's tap-and-pay feature, according to the Journal.

PayPal, which spun off from e-commerce company eBay Inc last year, has focused on aggressive growth.

The company's revenue in the second quarter rose more than 15 percent to $2.65 billion from a year earlier and the volume of payments it processes jumped 28 percent to $86.21 billion.

PayPal is also in discussions with banks that issue cards, to explore new products and partnerships, the Journal report said, citing people familiar with the matter.

PayPal was not immediately available for comment.

Shares of PayPal were marginally higher in premarket trading on the Nasdaq. Up to Friday's close of $37.07, the stock had risen 2.4 percent this year.

By Narottam Medhora; editors: Anil D'Silva and Maju Samuel.