“Mobile payments are having a heyday. Apple Pay has been splashed across the news and 20-somethings are paying for taxis with their smartphones,” Alex Barinka and Doni Bloomfield report for Bloomberg. “Yet one stalwart risks being left out of the conversation: PayPal.”
“That’s part of the reason PayPal is getting spun off from EBay Inc. (EBAY), giving the business more flexibility to innovate and become the method of choice to replace your wallet. Once known as the ground-breaking startup founded by the likes of Peter Thiel, Elon Musk and Max Levchin before it was purchased by EBay in 2002, PayPal is now facing new competitors from Square Inc. to Apple Pay, which will be introduced in the U.S. this month,” Barinka and Bloomfield report. “‘If you’re below 30, PayPal’s not relevant,’ Gene Munster, an analyst at Piper Jaffray Cos., said in an interview. ‘With consumer awareness, Apple is out there overnight. That’s a piece PayPal is desperately struggling with.'”
“Apple accelerated its move into mobile payments with partnerships — aligning with financial companies like Citigroup Inc. and American Express, as well as merchants such as McDonald’s Corp. and Whole Foods Market Inc. Instead of working with PayPal on the development of its payments system, Apple struck a deal with Stripe. To make a payment, a person swipes an iPhone at the checkout counter and confirms the transaction by using the fingerprint scanner on their iPhone,” Barinka and Bloomfield report. “The advantage it has over PayPal is that the payments system is integrated directly into the iPhone 6 and iPhone 6 Plus. The Cupertino, California-based tech giant already sold 10 million of the new devices in their debut weekend alone.”
Read more in the full article here.
Related articles:
Bitten by Apple Pay, eBay gets 3 downgrades – October 1, 2014
Apple Pay arriving with iOS 8.1 this month, sources say – October 1, 2014
iOS 8.1 beta shows Apple Pay to work with Siri – October 1, 2014
Apple Pay: A semi-monopoly on the real killer app – October 1, 2014
Apple Pay casts shadow on PayPal Spinoff – October 1, 2014
How PayPal blew their chance to be an Apple Pay preferred partner – September 30, 2014
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
Paypal doesn’t do much for the over 30 set either, like me.
Yeah, the only reason I ever joined PayPal was to have some kind of purchase security on eBay. But eBay quickly lost my interest as it evolved into an unwieldy and rather sketchy behemoth that is mostly a front for retail establishments. My interest in PayPal faded along with it, particularly after PayPal was purchased by eBay.
eBay should have spun off PayPal a long time ago. Corporate management should be lambasted for their lack of vision in this regard.
Question is, how will E-Bay integrate Apple Pay?
Check out the MDN article on this topic. Apple kicked PayPal out of the Apple Pay program after the eBay president forced PayPal into an agreement with Samsung.
Yet another terrible corporate decision…
Actually, I use PayPal to send money to and receive money from individuals. I wonder if Apple Pay will allow me to send money to other Apple Pay members (or even anyone with a credit card or bank account)?
That and the lack of universal online payment system are 2 reasons why I’m starting to think the “ApplePay will kill/hurt PayPal” we keep hearing about is going to turn out the same way that iCloud was meant to damage Dropbox. The U.S. is probably different but I haven’t seen PayPal as a payment option in any store I’ve visited in Australia so ApplePay and PayPal will serve different situations. PayPals growth might be stunted but it won’t be time to close your account
In my area of the US, PayPal checkout is available at Home Depot and one other place I can’t remember right now. That doesn’t correspond at all to the places ApplePay will work, though, because ApplePay uses the contact-less terminals that are already present at most retailers.
I, too, think PayPal will be stunted by this. Or maybe fenced in: I never saw them getting bigger anyway, given their business model. But I also don’t see Apple working ApplePay into the fabric of all money transactions, either.
Yeah we get PayPal ads on TV saying how they can do everything for you and protect your bank details but I won’t receive money through them anymore, far too expensive. Last thing I sold on eBay, through eBay and PayPal fees I ended up with 1/2 the final price. Never sold through eBay again. As far as online payments go, I prefer using PayPal to entering credit card details on random sites
Yeah, it’s pretty bad with the fees. Last thing I sold I was like, “but that was *my* stuff, not eBay’s!” I rarely use eBay anymore – cripes, they even take their cut out my shipping costs.
The only thing paypal is good for is for sending money to individuals. Which I only do when I buy stuff from eBay. Which is rare.
I use Square Cash to send and receive money from individuals; money transfers from one checking account to another usually take just 1 day, vs. 3-5 business days using PayPal. I even use it to transfer money between my own accounts, which are at different banks. It just takes a debit card to set up an account and (at least for now) the Square Cash transfers are free. (I have no affiliation whatsoever with either firm, but definitely prefer Square Cash!!!)
Maybe a silly question but why not just use your online bank site for such transactions? I do my banking on the iPad and banks have their own respective apps for this.
Fair question! In my case, my credit union’s site doesn’t allow me to transfer to an external (bank) account. So, I transfer from a checking account from the credit union to another checking account at a completely different bank account (Wells Fargo).
I suppose I could write a check and deposit it using the Wells Fargo bank app by taking a picture of it — but’s it’s so much easier to transfer using Square Cash (just send an e-mail with the $ amount in the subject line, and cc’ing cash@square.com).
Most banks don’t let you do transfers to another bank, unless you’re doing something like Bill Pay, which often is just the bank cutting a physical check and mailing it to the recipient. If you do have the ability to send money to an outside bank account, it is usually via wire transfer or a service with an additional monthly fee attached to it ($40-$80).
At least with Wells Fargo, it looks very easy to set up transfers to any external [Personal|Business] [Checking|Savings] account.
Both PayPal and Square have started advertising like crazy on my local L.A. stations, desperately trying to reclaim mindshare. But how can they really prepare for the Apple tsunami?
I am convinced that ApplePay will be one of the greatest Apple success story, not to mentioned a MASSIVE income source with the incredible fee deal they set up with the banks… Good times ahead!
What’s a PayPal?
>‘If you’re below 30, PayPal’s not relevant,’ – Gene Munster,
If you’re sane and intelligent, Gene Munster is not relevant.
But the TV screen is coming in 2015!!!
“To make a payment, a person swipes their iPhone at the checkout counter…”
Wait. They’re not THAT thin. Yet.
Swiping? Once again, Samsung out-innovates Apple here.
The new Samsung Note 4 has a built-in credit card reader — you just swipe your card right in that gap between the screen and outer frame. (rimshot…)