Mastercard on Tuesday said it is extending its relationship with online payments processor PayPal as part of a multi-faceted deal that'll be mutually beneficial to all parties involved.

As per the deal, a PayPal user can select their Mastercard as the default payment option during checkout with Mastercard being presented as a "clear and equal" payment option within the PayPal Wallet. Those that elect to pay with a Mastercard through PayPal will receive the same safety and security measures that come with "traditional" Mastercard transactions.

What's more, those paying for a transaction using PayPal Wallet via their smartphone can fund the purchase from their Mastercard at the more than five million merchants that accept contactless payments around the world.

Customers will also be able to instantly cash out funds held in their PayPal accounts to a Mastercard debit card.

PayPal arranged a similar partnership with Visa in July.

The partnership also states that PayPal will be provided certain financial volume incentives and will no longer be subject to digital wallet operator fees.

As The Wall Street Journal points out, the deals put an end to bitter fights between PayPal - which split from parent company eBay a year ago - and the two large card issuers and further helps to solidify PayPal as a universally accepted payment method.