“Sources close to Apple and PayPal and in the financial services industry have confirmed that PayPal and Apple were indeed in talks for PayPal to be a ‘preferred payment process’ for Apple Pay,” Ian Kar reports for Bank Innovation. “However, PayPal pissed Apple off so much that Apple excluded PayPal from Apple Pay altogether.”
“Apple and PayPal started talking early on in Apple’s development of Apple Pay, as Apple was setting up partnerships with the card issuing banks and card networks,” Kar reports. “Since PayPal’s a payments industry leader, it would have been shortsighted for Apple to not reach out to PayPal.”
“But while these talks were going on, PayPal went ahead and partnered with Samsung on the Galaxy S5 fingerprint scanner, a move that was reportedly forced onto PayPal by eBay CEO John Donahoe,” Kar reports. “PayPal’s now-former president David Marcus was purportedly categorically against the Samsung deal, knowing that it would jeopardize PayPal’s relationship with Apple. Donahoe won the day, however.”
MacDailyNews Take: Won the day and lost the war. John Donahoe is obviously a fool.
Kar reports. “Apple was said to be absolutely furious that PayPal did the deal with Samsung, which led Apple to cut PayPal out of the Apple Pay process entirely. (One source said: ‘Apple kicked them out of the door.’)”
Read more in the full article here.
MacDailyNews Take: This really couldn’t be any simpler to understand, so it prompts the question: How do people like John Donahoe end up as a CEO of anything?
The majority of people with money and the proven will to spend it are Apple customers. So, what does PayPal, which is in the money business, do? They go with a scheme that any random person off the street could have told you will fail and choose a company and a platform that caters to cheapskates and the poor, in the process alienating the one company with which they desperately needed to partner, in order to not be steamrolled into oblivion. At no time was Donahoe’s move ever a good idea. His fecklessness is appalling. At least PayPal employees know who to blame for what’s coming their way.
This hilariously atrocious episode will soon be a featured case study in Business 101: “Boneheaded Moves To Avoid.”
Stripe must absolutely love John “Dummy” Donahoe.
Related articles:
IDC: Apple again took the smartphone cream in Q2 – August 15, 2014
iOS users seven times more active than those who settle for Android – August 4, 2014
Report: Google’s Android the ‘preferred platform’ for terrorists – August 1, 2014
Yet more proof that Android is for poor people – June 27, 2014
More proof that Android is for poor people – May 13, 2014
Apple’s iOS dominates in richer countries, Android in poorer regions – March 25, 2014
IDC: Apple iPhone to maintain high value, margins, and market share through 2018 – February 28, 2014
Why Apple’s iPhone keeps raking in the majority of mobile phone profits – March 19, 2014
Apple dominates with 60% share of mobile phone profits – March 18, 2014
Android has the most unit share, but Apple dominates profit share, making more money than all Android smartphone makers combined – November 15, 2013
Android users poorer, shorter, unhealthier, less educated, far less charitable than Apple iPhone users – November 13, 2013
IDC data shows two thirds of Android’s 81% smartphone share are cheap junk phones – November 13, 2013
IDC: Android worldwide smartphone market share passes 80% – November 12, 2013
Apple Maps makes killer comeback as Google Maps loses access to world’s most desirable mobile customers – November 12, 2013
Android phones 3 times more likely than Apple iPhones to have been bought at discount store – August 22, 2013
CIRP: Apple iPhone users are younger, richer, and better educated than those who settle for Samsung knockoff phones – August 19, 2013
Twitter heat map shows iPhone use by the affluent, Android by the poor – June 20, 2013
Apple’s iPhone generates more in carrier fees than rival smartphones – January 30, 2013
Unsurprisingly, survey says Apple’s iOS is highest priority among mobile developers – January 23, 2013
People buy more Android phone units and do less with them vs. Apple’s revolutionary iPhone – November 14, 2012
Study: iPad users more likely to buy – and buy more – online than traditional PC users – September 29, 2011
iPhone users smarter, richer than Android phone users – August 16, 2011
Yankee Group: Apple iPhone owners shop more, buy more, remain more loyal vs. other device users – July 20, 2010
iPhone owners more likely to pay for digital content – November 26, 2009
Study: Apple iPhone users richer, younger, more productive than other so-called ‘smartphone’ users – June 12, 2009
Apple iPhone users buy many more apps, surf the Web much more than other ‘smartphone’ users – March 27, 2009
As Apple Pay rolls out, eBay plans to spin off PayPal business – September 30, 2014
The rush is on worldwide to support Apple’s revolutionary Apple Pay – September 19, 2014
Apple Pay set to radically change commerce – September 18, 2014
Banks race to gain Apple Pay advantage – September 16, 2014
Apple Pay triggers pure panic at PayPal, begets ‘dumbest ad campaign ever’ – September 16, 2014
Frightened PayPal slams Apple Pay in full-page newspaper ads – September 15, 2014
Wells Fargo brings revolutionary Apple Pay to customers and merchants – September 15, 2014
Apple gets 15 cents of every $100 Apple Pay purchase – September 12, 2014
Capital One partners with Apple on Apple Pay – September 12, 2014
Apple Bank is only a matter of time – September 12, 2014
The hidden brilliance behind the timing of Apple’s adoption of NFC – September 12, 2014
MasterCard SVP: Apple Pay trumps traditional credit and debit cards in security – September 11, 2014
Authorize.Net announces support for Apple Pay – September 11, 2014
Apple Pay’s myriad advantages over the $300 million Google Wallet flop – September 11, 2014
Apple Pay may boost sales of larger iPhones, hurt Android phone sales – September 11, 2014
Why Apple Pay will hurt PayPal – September 10, 2014
Apple Pay will demolish the barrier between online and offline shopping – September 10, 2014
Disney CFO: Apple Pay is a huge advantage – September 10, 2014
Pacific Crest: Visa, MasterCard, American Express boosted by Apple Pay – September 10, 2014
Apple to rake in fees from banks with Apple Pay mobile payments platform – September 10, 2014
Visa teams with Apple on Apple Pay mobile payments platform – September 10, 2014
MasterCard partners with Apple to integrate revolutionary Apple Pay – September 10, 2014
TSYS supports Apple Pay – September 10, 2014
Apple announces Apple Pay mobile payments – September 9, 2014
Tee that up for your MBA class case study.
Meh, taking money from the poor is a very profitable field of endeavor. I don’t think PayPal will be too injured.
Of course they will!!! PayPal is now stuck with Samsung, which means Android, which means poor people…
At least Apple customers actually have money to use Apple Pay with:)
The fact that they are now being cut lose suggests that ebay aren’t exactly confident they made the right choice. Sadly it is PayPal which will suffer not the organ grinder.
Poor people spend their money less prudently than the wealthy. Poor folks are going to generate *all* the point-of-sale purchases.
It doesn’t matter, Apple’s cut is not per transaction it’s per dollar amount. 15 cents per $100 to be exact.
John Donahoe sounds like he is Microsoft executive material.
Donahoe is Dilbert’s boss.
I can already envision the MDN headline…
“Blood on Apple’s Fingerprint Scanner”
So can someone explain how this announcement got eBay stock to go up more than 7.5% today? And is Paypal expected to also go up? That is what I am reading. Is that possible?
Easy.
PayPal is now an albatross to be rid of.
eBay will probably profit from this and be free to use any and all payment services.
Because rumors are that PayPal is now up for sale. Apparently, eBay shareholders like the idea. Or, at least, Wall Street sharks like the idea.
This explains PayPal’s marketing tactics after Apple Pay was announced. It’s just like what Samsung does. Feel threatened? Lets link celebrities who are dumb enough to put naked selfies on iCloud with a weak account password, with the security of Apple Pay. Next, PayPal will start touting obscure features that no one wants as reasons why PayPal is better…
And these announcements (from today) may be related to this story of leadership failure: (New CEO and separation from eBay)
https://www.paypal-community.com/t5/PayPal-Forward/eBay-Inc-Names-Dan-Schulman-to-Lead-PayPal/ba-p/886875
http://update.ebayinc.com/latest-news/ebay-inc-to-separate-ebay-and-paypal-into-independent-publicly-traded-companies-in-2015/
Wow, is John “Dummy” Donahoe related to Steve “Dummy” Ballmer?
There is currently only one stock. It’s up today because they announced that 1) Donahoe is out and 2) PayPal will be spun off into a separate company/stock. Not sure this is going to be enough to open discussions with Apple again, but I’m sure they’ll try.
If I were on eBay’s board, I would send Donahoe off to be the CEO of the split off PayPal. “You put the holes in the the bottom of this ship, you have to fix it, or you go down with the ship.”
My business plan:
1) Establish successful secure financial transfer company, a field in which reputation and trust is essential.
2) Have said company establish close partnership with a company whose leader has been convicted of embezzlement, bribery, and tax evasion.
3) ???
4) Profit?
What a catastrophe. But it gets WORSE. Dummy Donahoe himself just got ‘Kicked Out The Door!’
Carl Icahn Wins Again: eBay To Spin Off PayPal, CEO John Donahoe Is Out
And so Carl Icahn wins again, this time with his demand that eBay spin off PayPal. As a reminder, eBay swore up and down it would never spin off its best performing asset, then swore again, and swore some more. And then 3 minutes ago, revealed it was only kidding, because eBay just reported PayPal will be spun off in a move that will cost CEO John Donahoe his job: “Neither Donahoe nor Swan will have an executive management role in the new eBay and PayPal companies. But to provide continuity, they each expect to serve on one or both of the boards of the two companies. Oh, and another winner: “Goldman, Sachs & Co. and Allen & Company LLC are serving as financial advisors to eBay Inc.” . . .
~ ~ ~ ~ In my crystal balls I see a man,
~ ~no a company,
~ ~ ~ ~ crawling on their knees to a man,
~ ~ no a company,
~ ~ ~ ~ begging for forgiveness, asking if they can be friends again.
~ ~ ~ ~ My balls grow cloudy. I can see no more…
Of course it is!
PayPal Spin Off Is All About Apple Pay
It is no coincidence that three weeks to the day after Apple Pay‘s introduction eBay Inc “chose” to spin off PayPal.
…With Apple Pay, the main driver of PayPal growth is in jeopardy. That driver is not marketing, not its management team, not even PayPal’s technology per se. Rather, that driver is the network effect. . . .
There’s an ointment for that.
I prefer the powder. 😉
Just give me the shot and get it over with, quick.
That rash has got to go.
According to AppleInsider users will be able to use Apple Pay on websites. This is going to greatly impact PayPal’s core business. Another note: the ability to use Apple Pay on website is going to be one of the main features which will fuel sales of Touch ID enabled iPads.
Wow: “One source said: ‘Apple kicked them out of the door.’”
Sounds like some good leadership qualities at Apple.
Fact: Never had a problem with PayPal. Actually good experiences.
However I saw how they treated others, and decided that maybe, doing business with them, was not in my long term best interest.
Since then I have moved all my online transactions to VISA, and soon ApplePay.
And it will STILL be VISA (assuming that’s what’s on your iTunes account). PayPal was great as it allows you to do cash/bank transactions. This won’t do for Apple Pay. But, I guess the credit card companies will be happy.
With PayPal, you could have touched your touchID and a few minutes later the money could be transferred between two individuals. Big company, or one person. Would be a great way to transfer funds. As it stands, we will have to continue paying the cc company.
I for one hope that Apple Pay does eventually hook up with paypal.
Well, obviously David Marcus would make the right decision. Anyone with Captain Kirk for his dad has got to be pretty bright. 🙂
“How do people like John Donahoe end up as a CEO of anything?”
Chalk it up to the incestuous relationships of the good old boy network of the corporate elite. The corporate system, especially corporate governance, needs fundamental reform. It’s time to stop these jerks from stomping all over the shareholders and employees in order to advance their own interests and feather their own nests.