Why Apple Pay will hurt PayPal

“Apple’s new payment system hopes to change the way people make purchases both in stores and in apps, and that could become a big problem for the Web’s biggest digital payment network, PayPal,” Jason Del Rey reports for Re/code.

“In addition to allowing people to pay in stores, Apple Pay will also let owners of the newest iPhones [and Apple Watch] buy things within participating apps by using the credit or debit card they have on file with iTunes or the App Store,” Del Rey reports. “This means they don’t have to go through the annoying process of typing in payment information on small screens.”

“When it comes to e-commerce, Apple Pay can have an impact on PayPal just focusing on app payments as it is now,” Del Rey reports. “If it extends Apple Pay into the mobile Web, things could get even worse [for PayPal].”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Dan K.” for the heads up.]

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      1. If consumers demand it, Amazon will add it. Why? Because Amazon is all about selling, and if Pay will help Amazon sell more stuff (just not Kindle Fires or Fire Phones), then why would Amazon care?

  1. As much as I would like to see PayPal suffer though I doubt it. I can’t see eBay embracing anything over its own payment system.

    Why would they ? They already have all credit cards tied into its system. If you want to buy from eBay, your gonna have to PayPal in the middle getting its slice of every transaction.

    It’s possible I guess but unlikely.

    1. Hmmm… Store? Auction? Amazon and Ebay have good reasons to drag their feet, but a compelling feature like Pay could be a crack that allows competitors a way to compete with these behemoths if they the choose lock out Pay. For me, once Pay is place I will definitely favor those companies that adopt it.

  2. a few months ago, I ordered a little something of a girly something from a ‘retail seller’ in estonia. I used paypal. After much time and no delivery, this ‘retail seller’ wouldn’t return emails or calls and I had to open a paypal dispute. How will Apple provide for disputes. I would think they’d appreciate the need.

    1. The dispute will likely be through your card issuer. Pay is likely to only be a middle man in that it facilitates the exchange of information that leads to the transaction as oppose to actually being the one to facilitate the exchange of funds.

  3. Apple Pay will make a dent in PayPal but currently I don’t see a way for someone to pay ME via Apple Pay. Like if I’m selling some really cool cat helmets on Etsy or something and I have a paypal account, paypal has that all sorted and I can retire in luxury.

  4. I would love to see Paypal get some competition that would drive its fees down. Sadly, that won’t happen. Apple has never been about driving prices down.
    Yes, we can expect more but it will cost the same or more.

    1. “Apple has never been about driving prices down.”

      iTunes was initially resisted by record companies because they thought that 99¢ per track was far too cheap. As things turned out, that uniform, low price was the key to making it take off.

  5. “Apple Pay will also let [users] buy things … by using the credit or debit card they have on file with iTunes or the App Store”

    Picking nits here, but I don’t think that’s right. I’m pretty sure iTunes has nothing at all to do with Apple Pay. You register your card with Apple Pay. That’s the card you’re going to use, not your iTunes card.


      1. Yeah, I see that now. Apple’s web pages on Apple Pay didn’t immediately make that clear. They concentrated on the process of loading a credit card into Apple Pay by taking a picture of it.


  6. If you have a proper password manager you don’t have to now. 1Password does an excellent job with PayPal on the Mac and iOS devices. PayPal also has a solid record for resolution of customer disputes.

    Old Russian Proverb repeatedly quoted by Ronald Reagan:

    Trust but verify

    Apple is a newbie to third party payments discounting in app purchases.

  7. Yeah Apple is a newbie so they won’t invent an MP 3 player that will compete with existing ones let alone take over the market.
    Same with smartphones.
    Same with tablets.
    Same with watches.
    Yeah no way Apple is going to drink the milk shake of established companies.
    The number of companies who have underestimated Apple are in the thousands and many of them are dead and gone.
    Also Reagan was a dope and nothing but a corporate shill before, during, and after his presidency.

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