“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.
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