Morgan Stanley: Apple Pay could slay PayPal, other wannabes in mobile e-wallets

“Apple’s mobile e-payment service Apple Pay presents no major threat to the big credit card companies, but it’s likely to be highly disruptive to emerging players in the field, at least in the U.S., investment bank Morgan Stanley said in a report Tuesday,” Patrick Seitz reports for Investor’s Business Daily.

“Apple (NASDAQ:AAPL) has partnered with major credit card companies American Express, MasterCard and Visa on Apple Pay. The Apple Pay technology in iPhone 6 series smartphones and the Apple Watch should help advance standardization of the mobile payments infrastructure, the report says,” Seitz reports. “Apple Pay uses near-field communications (NFC) chips to let people make retail payments by touching their mobile device rather than swiping a credit or debit card.”

“In the U.S., Apple Pay is ‘highly disruptive’ to newer players in the market, which have had trouble getting traction, Morgan Stanley said in its report,” Seitz reports. “‘Most other players looking to launch mobile wallets have either struggled with making the package sufficiently cost-effective/attractive for merchants (PayPal, Square, Google Wallet) or sufficiently intuitive and convenient for the consumer (Isis/SoftCard, other telco wallets),” the report says. “We think Apple may have solved both problems in one application.'”

Read more in the full article here.

Related articles:
Bill Gates: Apple Pay is ‘fantastic’ and a ‘real contribution’ – October 3, 2014
Apple Pay: An in-depth look the world’s most secure payment system – October 2, 2014
With Apple Pay launch, mobile payments have finally arrived – October 2, 2014
The kids aren’t into PayPal as Apple Pay rules mobile-pay buzz – October 2, 2014
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


  1. Of course Pay is not a threat to the major credit card companies, Apple is using them for its service!! Visa, Mastercard, etc. LOVE Pay because it will severely reduce their fraud expenses where they have to eat fraudulent purchases and spend resources on fraud prevention.

    Pay will destroy PayPal, which is why Ebay is spinning it off. The quantum leap in security and convenience Pay brings to both mobile and in-person transactions is unmatchable by anyone else.

    1. Until Apple starts to get blamed for the purchases made by children.

      Unless, of course, Apple creates purchase limits separate from credit card limits and parental controls.

      But then they will need to track how much you spend… Then accusations of tracking will start.

      This could end up being a ‘no win’ situation for Apple.

      Time will tell. I hope they’re careful.

        1. Hmm. Let me see, I give my daughter a phone. She accesses it with itouch. She’s 15 years old and very responsible (or so I believe). I give her the right to use Apple Pay with my credit card registered on her phone. She can buy small things. I allow her to use it going shopping with her friends. Until now, I gave her my credit card and she will bring it back after she is done. My credit card limit is more than I wish for her to spend. But now, it’s so easy an my card is always registered on her phone.

          Yes, I can see how I am totally out of line in my question of parental controls and absolutely deserve that one star. I apologize that I am so stupid and so moronic to visualize situations where various kinds of parental controls and limits might be required.

          Please, keep the one stars coming.

          1. Hold on… I’ve heard about this in movies but never quite believed it. You daughter (or indeed any other person) can use your credit card? On the high street? That couldn’t happen here, even if I wanted to give mine to her. I know you guys don’t have chip and pin yet, but don’t you have to authenticate high street purchases with a signature at least?

            The only way my daughter could get away with using credit card is with “cardholder not present” transactions on the phone (or on-line).

            Anyhow, if it turns out you can set up your card on her phone, I’m assuming they’ll have a similar parent approval system like they do now for family sharing.

            1. I arranged to get my daughter her own credit card under my own. The card is in her name and she must sign for purchases, but the purchases appear on my statement and I am liable for them. I arranged this when my daughter was in school/traveling/living overseas. At the time, I did not want her to have her own credit card, but did want her to be prepared for unexpected emergencies. The arrangement also came in handy when we wanted to treat her for some reason (birthday, whatever); she just had to put the charge on the credit card and we did not have to worry about sending money. Worked fine. Now that she is out of school and working, she can apply for her own credit card. Incidentally, I understand that she got to share my own credit history during this time, so this is an added benefit for someone starting out with now no credit record.

              The real problem with plastic credit cards is theft of the actual card, or theft of the card data, enabling fraudulent purchases. It would be much more secure to set something like this up through Apple Pay instead of plastic.

              Basically, you should not enable Apple Pay for any family member you would not trust with your plastic credit card. But Apple Pay will still be far more secure than plastic.

          2. “an(d) my card is always registered on her phone”

            Don’t have it always registered on her phone, problem solved.
            If you can’t control your credit cards, it’s not Apple’s fault.

          3. I’m not sure what is the problem here. This is absolutely no different that giving your daughter a physical card — you can always take it back, exactly the same way you can take back that physical card. And it will likely work exactly the same way — the charges will show up on your statement, but under her name.

            The way I understand this, Apple here is just an intermediary — a credit card processing agent — between the merchant and the credit card issuing bank. Whatever parental controls and restrictions are available to the consumer form the bank, they will be available here.

            We’ll see how this works, but it is possible that in some future iteration of ApplePay, Apple decides to add some features and functionality to the service, enabling some level of parental control beyond what banks currently offer. The question is whether their agreement with banks actually allows them to do that.

  2. Paypal chose to partner with Samsung rather than with Apple. That decision should work out well for them so long as Samsung is doing fine.

    Oh wait … maybe it wasn’t such a smart move after all. What a shame !

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