PayPal Wants in on Apple’s Mobile Payment System

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The online payment service PayPal is hoping to get in on whatever Apple has planned for a mobile payment system and has even gone so far as to pitch its ideas to the iPhone and iPad maker. PayPal is apparently willing to be a part of Apple's back end systems without any branding, hinting that it sees whatever plans Apple may have as a very big deal.

PayPal wants in on Apple's mobile payment actionPayPal wants in on Apple's mobile payment action

Sources speaking with Re/code said PayPal is telling Apple, "We'll do it in the background," adding, "Basically, it's just, 'We want to be a part of this.'"

Rumors have been circulating that Apple is working on some sort of digital wallet and payment system for the iPhone. Some have claimed those plans include NFC technology, but it's more likely the company will go with a combination of TouchID, Passbook, and iBeacon -- all of which are technologies it controls.

Assuming the sources are correct, it isn't a surprise that PayPal would want to find a way to be a part of Apple's mobile payment plans. With so many iPhones already in use, there's already a massive user base in place to take advantage of the service, and those users could start using Apple's payment system instead of PayPal.

PayPal is willing to offer Apple parts of the system it needs to handle payments, such as fraud detection, and would be happy to handle payment processing, too.

Apple CEO Tim Cook dropped some big hints about the company's plans to get into mobile payments during the company's fiscal earnings conference call earlier this week. He commented on how popular TouchID has been for authenticating iTunes Store purchases on the iPhone 5S, and followed up by all but confirming Apple's plans saying,

The mobile payments area in general is one that we've been intrigued with and that was one of the thoughts behind the Touch ID. But we're not limiting ourselves just to that.

That's a pretty big shot across the bow for PayPal, and the company is smart to proactively work to get in on Apple's plans. If the two companies aren't partners in the mobile payment game, PayPal could have some serious competition on its hands.

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PayPal is smart to do what it can to be Apple's partner instead of competitor. Just last quarter alone Apple sold over 50 million iPhones, all of which are potential mobile payment customers who could use their service instead of PayPal.



There must be an Icahn element to this story somewhere.  Either it’s something that he’s pushing Apple and eBay to do or it’s a reaction to what he’s trying to do with Apple ad eBay.  The coincidence is just too great.


Just what advantage would this be for Apple? They already have much of this system in house. They already are using their own system in their stores. I just can’t see Apple giving PayPal a part of this business with access to Apple’s customer base.


No. Just no.


PayPal has the cash moving (and ‘banking’) infrastructure in place, that I am certain Apple does not. I quite often use P/P as a bank, leaving money in my account for lengthy periods.  I also have sub-accounts for my teenaged daughters – making cash transfers to them an instantaneous breeze, and all three of us have P/P debit cards.

Apple doesn’t have any of that, and I doubt they want to get into that business. Besides, hooking up with PayPal gives them access to millions of ready customers, who are already P/P account holders.

Philip Cohen

Amazon/Apple/Whoever Payments …

Online or at physical point-of-sale, via card or mobile—from the merchant’s point of view—they all suffer from the same severe handicap from which eBay’s clunky PayPal suffers: none have interactive access to buyers’ funds in retail banking debit accounts, nor to retail banking credit accounts as do have the MasterCard and Visa “bankcards”; their only access to funds is as retail bank Credit Card Merchant Account operators (which is what “PreyPal” claims to be when it wants to appear to be not operating as a “bank” in its own right) via their own retail bank (Wells Fargo in the case of “PreyPal”). …

Even if any of these middlemen make use of direct debits via the ACH system (as “PreyPal” prefers to do to more cheaply access buyers’ funds), the access is not interactive: there is no immediate acceptance of the debit by the bank nor any guarantee that, the following day, the bank won’t reverse the debit due to an insufficiency of funds; the direct debit via ACH is simply not a suitable medium for physical point-of-sale transaction payments; the only safe route for point-of-sale transactions (credit or debit) is via a retail bank Merchant Account with its interactive linking to the retail banking system …

Regardless, these “pretenders” are all parasitic middlemen, an extra superfluous layer that, in the main, rides precariously on the back of the retail banks’ existing systems; they make their money out of the difference between what the banks/MasterCard/Visa charge them and what they then charge their merchant customers; therefore, their services, invariably, are going to be dearer, or are unlikely to be cheaper; anyone that thinks otherwise has been drinking too liberally of the disingenuous nonsense that continually flows from the eBay Dept of Spin …

“PreyPal”, however, is unique in that it operates a “pretend” bank—the unlicensed “bank” they have to hold onto merchants’ receipts cash flow, and the bank they don’t have when the banking regulator comes sniffing around. That “PreyPal” manages to skirt wholly around US banking regulation while operating this clunky, unregulated, non-FDIC-insured, “pretend” bank, frankly, defies belief; possibly it’s due to the same bureaucratic laziness/corruption that allows eBay to knowingly and calculatedly facilitate demonstrable, massive, blatant, auction fraud on the consumers of the world …

Regardless, if any of these middle-men players think that they are going to take other than micro-fractions, if any, of the payments market away from the MasterCard and Visa “bankcards”, I think that they are dreaming, or possibly they have accompanied Johnny Ho on one too many his many hallucinating trips with Alice down the rabbit hole to Wonderland …

Anyway, with the recent arrival of the professional “digital wallets” from MasterCard and Visa, all these pretenders are—with the exception of where they are effectively mandated/integrated into an online marketplace—now effectively redundant …

And, with respect to physical point-of-sale transactions by such pretenders (Square excepted, as it offers a hardware answer to a particular problem), can I simply invite readers to, next time they visit The Home Depot, ask a cashier how “Pay Here With PayPal” is going—LOL …

Hello “MasterPass”; goodbye clunky “PreyPal”—it has not been nice knowing you ...

Richard Bagdonas

We at Mahana ( have looked at various beacons from all of the regulars in beacon manufacturing and know that when Paypal finally releases their Beacon, it is going to have more long-term value to app companies because they don’t have a battery.  (I am not looking forward to changing the batteries on our currently-deployed iBeacons.)

Paypal is always on the hunt for new ways to enable simple commerce.  They have a great team that is willing to take risks to see what sticks.  Think Home Depot’s “Pay with Paypal” feature.  I have never used it, but think it is cool they actually made it work.  Over time they will iterate on their ideas and hone them to a really nice and simplified method that will eventually be easier than paying with a card (my phone will just know it is within X feet of the POS and the clerk will just charge my card).

Philip Cohen

@Richard Bagdonas,

“Think Home Depot’s “Pay with Paypal” feature.  I have never used it, but think it is cool they actually made it work.”

And therein lays the problem, a) you’ve never used it, nor have many others, and b) I have heard stories of cashiers asking the rare customer that wants to use it, to please not use it because it’s so clunky …

eBay / PayPal / Donahoe: Dead Men Walking ...

Richard Bagdonas

@Philip - the hardest part of that process is integrating into the POS.  Having spent the last 4 years doing just that with 12 of the largest POS companies and having built the largest POS integration platform for payments, I can say without a doubt that the front-end experience is just the frosting.  It may be light right now, but with the cake baked, they can put on new frosting pretty easily.  I am interested to see the existing cake frosted with BTLE.

BTW, if you are coming to Austin for SXSWi, be sure to come by the Beacon meetup.

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