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PayPal wants to partner with Apple on iPhone mobile payment platform - report

post #1 of 128
Thread Starter 
Online payment giant PayPal has reportedly been pitching Apple a potential partnership --?one that could see PayPal handle back-end security measures for a future iPhone-driven mobile payment system.

Touch ID


Details on PayPal's alleged pitch were revealed on Thursday by Re/code, citing unnamed sources who indicated that the company told Apple is it is "willing to white label parts of its payment service," including fraud detection and even potentially the processing of payments. PayPal is apparently willing to handle the background work for Apple because it has a strong desire to be a part of any mobile payment services the iPhone maker may offer.

While PayPal is apparently pushing hard at Apple, sources reportedly said it's "unlikely" that the Cupertino, Calif., company would need PayPal's services. However, that doesn't mean that a partnership is impossible.

Sources reportedly indicated that Apple is "finally committed" to a mobile payment platform, within which the iPhone would be the central device. Reporter Jason Del Ray suggested it could be a "scary proposition" for PayPal if it were unable to forge a partnership with Apple.

This week, Apple Chief Executive Tim Cook himself hinted that his company could offer a mobile payment system in the future driven by the secure Touch ID fingerprint sensor found on the company's flagship iPhone 5s. Cook went as far as to say that Apple is "intrigued" by the possibility of mobile payments, and admitted that e-wallet-like functionality was "one of the thoughts behind Touch ID."

For now, Touch ID is only used to unlock the iPhone 5s and to authorize iTunes Store purchases. The fingerprint sensor embedded in the home button relies on a "secure enclave" verification system embedded in the A7 processor.

Earlier this month, AppleInsider was first to reveal a new patent filing from Apple that detailed a touchless secure e-wallet system. The proposed invention describes a purchasing device, such as an iPhone, that would authorize transactions via two secure wireless interfaces.
post #2 of 128
Why not? PayPal has been in the payments game for a long time..makes sense a partnership of some kind could happen.
post #3 of 128

I think this would be at least a good option for Apple. It may have to be the only option, but how many people here already have paypal accounts and use them. I know I do. Sure, I don't use it everyday, or even every week but its still a decent service for what it does. 

 

Apple could still create its own service and let the customer choose what they want to use for payment options. 

post #4 of 128
in my mind I kinda hope the partnership works out, but at the same time I also wish the competition brings better options for us the users. but either way I'll be happy
post #5 of 128

Worried, Paypal?

post #6 of 128

Hasn't PayPal been in the news in the last few years about being hacked or the ability to easily hack it? If Apple can provide a single source mobile payment system, why bring in a secondary product that could be hacked? Yes, iTunes accounts could be hacked but I'm reading much more positive articles about Apple's security than others. I've also read stories about PayPal holding onto your money instead of just processing your order. 

post #7 of 128

Hey. Wasn’t eBay going to sell PayPal, or was that someone’s wish?

 

Forget partnering. Apple has a history of partners STEALING THEIR INTELLECTUAL PROPERTY. Either buy PayPal or go it alone.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply
post #8 of 128
I believe iTunes has more users than paypal...? Why would Apple share profits with someone else when they can do it all themselves?

If you get paypal involved no one will see it as an apple innovation, they'll see it as a paypal innovation, and paypal will eventually want to make more money by including android users
post #9 of 128
Buy paypal and eBay!
post #10 of 128

At least we can see Carl Icahn's plan much clearer now.

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post #11 of 128
Quote:
Originally Posted by macxpress View Post
 

I think this would be at least a good option for Apple. It may have to be the only option, but how many people here already have paypal accounts and use them. I know I do. Sure, I don't use it everyday, or even every week but its still a decent service for what it does. 

 

Apple could still create its own service and let the customer choose what they want to use for payment options. 

For several years, Apple allowed members to log in to iTunes with their AOL IDs and Passwords.

 

On a different topic, look for Google to become the world's most valuable company today or tomorrow. There is currently a $70 billion difference between the companies.  All Wall Street has to do is drop Apple's stock while pushing up Google's stock.  And, with Google's earnings on tap later today, there is a really good chance Google's stock will increase no matter what Google announces.

post #12 of 128
Quote:
Originally Posted by justp1ayin View Post

I believe iTunes has more users than paypal...? Why would Apple share profits with someone else when they can do it all themselves?

If you get paypal involved no one will see it as an apple innovation, they'll see it as a paypal innovation, and paypal will eventually want to make more money by including android users

 

I'm not sure this will be viewed innovative for Apple anyways. They may get the ball rolling with this, but I'm not so sure it will be the largest thing coming from Apple this year. A major hardware announcement with something thats "insanely great" is something Apple will known for as innovative. 

 

They already partner with PayPal for their app stores anyways, so its not like this will be something new for them. 

post #13 of 128
Quote:
Originally Posted by macxpress View Post

I'm not sure this will be viewed innovative for Apple anyways. They may get the ball rolling with this, but I'm not so sure it will be the largest thing coming from Apple this year. A major hardware announcement with something thats "insanely great" is something Apple will known for as innovative. 

They already partner with PayPal for their app stores anyways, so its not like this will be something new for them. 

Maybe but that's because people expect them to cute cancer. If it changes the way we pay forever, it's worth being mentioned as highly innovative. Imagine a few years from now, making all your payments with your phone or iwatch...

Apple has never been the first to do anything, they have just been the ones to perfect it
post #14 of 128
Quote:
Originally Posted by justp1ayin View Post


Maybe but that's because people expect them to cute cancer. If it changes the way we pay forever, it's worth being mentioned as highly innovative. Imagine a few years from now, making all your payments with your phone or iwatch...

Apple has never been the first to do anything, they have just been the ones to perfect it

 

But the simple fact is that it won't be mentioned as innovative by Apple. People (investors) are looking for something like AppleTV (the real AppleTV), or iWatch for innovative. 

post #15 of 128
Quote:
Originally Posted by leavingthebigG View Post
 

For several years, Apple allowed members to log in to iTunes with their AOL IDs and Passwords.

 

On a different topic, look for Google to become the world's most valuable company today or tomorrow. There is currently a $70 billion difference between the companies.  All Wall Street has to do is drop Apple's stock while pushing up Google's stock.  And, with Google's earnings on tap later today, there is a really good chance Google's stock will increase no matter what Google announces.

That and $2.95 will buy you a medium coffee at starbucks.

 

Market Cap means very little... 

 

I think if Paypal were to partner... Apple's reach out is that the paypal account becomes a card in the wallet.

But I strongly believe Apple would rather partner directly with big banks and EMVCO and become a card payment processor directly.

Reason:  Apple already has 1/2Billion CCs in their ITMS store...  driving that to a Billion or more by partnerships, and then providing a tokenized payment service (Apple provides one time transaction IDs throughout the process for exactly the amount payable only to the 'seller' and exactly for the timestamp on the purchase).  

 

I see Apple going it alone.  Again Apple wants to supplant PayPal, and fight the mobile payment battle with the real competition.... Amazon/Kindle.

post #16 of 128
Quote:
Originally Posted by Tallest Skil View Post
 

Hey. Wasn’t eBay going to sell PayPal, or was that someone’s wish?

 

Forget partnering. Apple has a history of partners STEALING THEIR INTELLECTUAL PROPERTY. Either buy PayPal or go it alone.

 

I was going to say something stupid just like this to reach my daily trolling quota but you've beaten me to it :)

post #17 of 128
If Apple needs to buy something to get this off the ground buy Square not Paypal.
post #18 of 128
Quote:
Originally Posted by Rogifan View Post

If Apple needs to buy something to get this off the ground buy Square not Paypal.

 I agree...I forgot all about Square. Square is awesome!

post #19 of 128
Quote:
Originally Posted by island hermit View Post

At least we can see Carl Icahn's plan much clearer now.

LOL So that's where he got the $500 million 1biggrin.gif
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post #20 of 128
It's the entire CC industry that is insecure. Europe went to secure chip CC system over 20 years ago. The banks and CC industry is too wedded to profits for investors and CEOs and government bailouts and bribes to have any interest in decreasing profits and this mansions to change.

There is no solution out there for paypal and Apple unless they can bypass at least the CC industry. It doesn't matter if Apple has all these accounts; they're attached to CCs and are insecure by for that reason alone. Of the Target victims, how many of them have accounts with Apple that are linked to the hacked CCs?

TouchID will not protect us as long as the financial infrastructure is itself insecure and will remain that way for the foreseeable future.
post #21 of 128
Quote:
Originally Posted by TheOtherGeoff View Post
 

That and $2.95 will buy you a medium coffee at starbucks.

 

Market Cap means very little... 

 

I think if Paypal were to partner... Apple's reach out is that the paypal account becomes a card in the wallet.

But I strongly believe Apple would rather partner directly with big banks and EMVCO and become a card payment processor directly.

Reason:  Apple already has 1/2Billion CCs in their ITMS store...  driving that to a Billion or more by partnerships, and then providing a tokenized payment service (Apple provides one time transaction IDs throughout the process for exactly the amount payable only to the 'seller' and exactly for the timestamp on the purchase).  

 

I see Apple going it alone.  Again Apple wants to supplant PayPal, and fight the mobile payment battle with the real competition.... Amazon/Kindle.

The market cap position change would be spotlighted as another Google positive and another Apple negative. Market cap means a great deal. Remember how the press trumpeted Apple supplanting Microsoft as the most valued software company.  Of course, Apple began to earn much more money than Microsoft something Google will be unable to do Apple for many years to come if ever.

 

On topic, I I also believe Apple will go it alone. "White labeling" parts of its payment system to work with Apple only means PayPal would then be able to promote the system to others in a similar manner as Amazon did with other companies. The PayPal solution would not be a unique Apple solution and would make Apple dependent upon PayPal. This dependence is something Apple would be loathe to do. Google's hostage actions showed Apple that it cannot be dependent on another company to provide solutions to its customers.

post #22 of 128

I wish Apple could even take it a step further and compete with Square and Paypal directly. By this I mean they could allow users to accept  Apple payments on their websites. Allow us to create buttons, shopping carts, the whole works. What would even be better is if Apple could compete on the price they charge in transaction fees. When Google Checkout first started they offered a price of only 2.2% compared to Paypal charging a fee of 2.9% but then not many months later Google suddenly went to 2.9% just like Paypal. If Apple could offer an alternative payment system and charge lower than 2.9% they would get a lot of people to switch their website stores to them from Paypal or Google since those fees add up very fast. 

post #23 of 128
Quote:
Originally Posted by Dick Applebaum View Post


LOL So that's where he got the $500 million 1biggrin.gif

 

Carl is hedging his bets. Buys into Apple. Buys into Ebay. Begs Ebay to sell Paypal. Paypal comes knocking on Apple's door.

 

[Hmmmm... now that I look at that again... maybe it's Ebay's way of fighting off Icahn. Get Apple involved.]

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post #24 of 128
Apple's billions in the bank = iBank or AppleCard

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

Reply
post #25 of 128

I use Paypal occasionally (esp. for foreign payments), but it has absolutely the worst interface of any website (except for Amazon's).

 

Gives me a headache every time I use it. Nothing could be more un-Apple-like.

post #26 of 128
Quote:
Originally Posted by macxpress View Post

Quote:
Originally Posted by Rogifan View Post

If Apple needs to buy something to get this off the ground buy Square not Paypal.
 I agree...I forgot all about Square. Square is awesome!

Or both... sometimes the value of an agreement is more PR and Marketing rather than actual revenue.
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post #27 of 128
Quote:
Originally Posted by SpamSandwich View Post

Apple's billions in the bank = iBank or AppleCard

The only problem is, they are incredibly low-valued (low P/E) businesses. Apple's valuation will look even worse....

post #28 of 128
Quote:
Originally Posted by anantksundaram View Post
 

I use Paypal occasionally (esp. for foreign payments), but it has absolutely the worst interface of any website (except for Amazon's).

 

Gives me a headache every time I use it. Nothing could be more un-Apple-like.

 

I've used it for purchases on a couple of websites that I manage. What I found is that a few of the people won't use it because they "heard bad things" about Paypal.

 

Apple gets involved too deeply with Paypal and this will be the headline:

 

Apple and Paypal are there to rip off your bank account!

 

I can just feel it...

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post #29 of 128

What possibly Apple would gain partnering with MOST hatred service provider in the world?!!!

 

On the same note, Paypal should shut everything down and get the hell out of Internet once and for all ... NOW it's their best time.

....the lack of properly optimized apps is one of the reasons "why the experience on Android tablets is so crappy".

Tim Cook ~ The Wall Street Journal - February 7, 2014

Inside Google! 

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....the lack of properly optimized apps is one of the reasons "why the experience on Android tablets is so crappy".

Tim Cook ~ The Wall Street Journal - February 7, 2014

Inside Google! 

Reply
post #30 of 128
Quote:
Originally Posted by waldobushman View Post

It's the entire CC industry that is insecure. Europe went to secure chip CC system over 20 years ago. The banks and CC industry is too wedded to profits for investors and CEOs and government bailouts and bribes to have any interest in decreasing profits and this mansions to change.

There is no solution out there for paypal and Apple unless they can bypass at least the CC industry. It doesn't matter if Apple has all these accounts; they're attached to CCs and are insecure by for that reason alone. Of the Target victims, how many of them have accounts with Apple that are linked to the hacked CCs?

TouchID will not protect us as long as the financial infrastructure is itself insecure and will remain that way for the foreseeable future.

According to recent Apple patents, your iPhone would replace user-specific CC information (now given to the seller) with an anonymous token (with a shared secret known to your iPhone and the CC Company's Server) good for that transaction only.

Hacking any part of the exchange of data would not divulge any CC or user data and the token, having already been used would have no value.
Edited by Dick Applebaum - 1/30/14 at 8:51am
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post #31 of 128
Quote:
Originally Posted by soulsearcher View Post

I wish Apple could even take it a step further and compete with Square and Paypal directly.

I would be worried that it may turn into another "maps" thing. Taking on too many areas and trying to diversify your company can lead to watered down products. I'm not saying Apple can't do it, but there is a lot of work that would have to be done before it could be implemented, and I wouldn't want them to lose focus on their products and services already in place
post #32 of 128
Quote:
Originally Posted by leavingthebigG View Post
 

For several years, Apple allowed members to log in to iTunes with their AOL IDs and Passwords.

 

On a different topic, look for Google to become the world's most valuable company today or tomorrow. There is currently a $70 billion difference between the companies.  All Wall Street has to do is drop Apple's stock while pushing up Google's stock.  And, with Google's earnings on tap later today, there is a really good chance Google's stock will increase no matter what Google announces.

 

imo earnings tonight will matter. But with Google dropping Motorola, they got rid of the low margins part of there business and they are a key player at the low to mid-range market in phones and tablets. imo this is where the growth is atm until we have serious rumors of Apple entering a new market category.

 

The only I see Apple go up in the next 6 months is if Icahn have is way with the buybacks.

post #33 of 128
Quote:
Originally Posted by island hermit View Post

At least we can see Carl Icahn's plan much clearer now.

Yeah, it's possible he wanted Paypal to be spun off into a company for purchasing either by him (he'd have to get other investors involved or just buy a controlling stake) or by Apple:

http://www.delawareonline.com/article/20140126/BUSINESS/301260028/eBay-shuns-Icahn-moves-keep-PayPal-house

One thing Paypal has going for it is they have an established infrastructure for businesses and online wallets (iTunes wallets are for Apple purchases) and the marketing is already out there. They can say that anything that currently takes Paypal would automatically accept Apple's payments.

Apple does have more customers than Paypal - 600 million cards vs 137 million active Paypal accounts, 8 million transactions per day with Paypal, iTunes is over 50 million per day:

https://www.paypal-media.com/about
http://www.businessinsider.com/chart-of-the-day-apple-has-600-million-accounts-blowing-away-every-other-company-2013-11



Buying eBay is too much at $68b. It wouldn't benefit Apple to do that. If they spun off Paypal, it could be under half that. Although there is an issue of losing money taking time rolling out their own services, even if it's a year, Paypal only makes $1.6b per quarter in revenue so it's not as if they'd be missing out more revenue than they'd be spending on the purchase.

I think Apple has the facilities to do this on their own and keeping it under their control means they don't have to support 3rd party hardware.

They can call it Papple:



Pay is ok too. Sounds a bit like Apple Pie. iPay is a more obvious option I suppose.
post #34 of 128
Quote:
Originally Posted by Tallest Skil View Post
 

Hey. Wasn’t eBay going to sell PayPal, or was that someone’s wish?

 

Forget partnering. Apple has a history of partners STEALING THEIR INTELLECTUAL PROPERTY. Either buy PayPal or go it alone.

 

indeed, imo paypal will want to get into android devices too so Apple will help pay for a structure that will then be used more on android devices.  Pretty much like google did.

 

Apple has millions of "credit cards" into itunes, so its pretty obvious to me that Apple needs to strike deals with credit card companies like Mastercard or Visa for there mobile payment system.


Edited by herbapou - 1/30/14 at 11:28am
post #35 of 128
Quote:
Originally Posted by Marvin View Post



 

Fascinating chart! Apple is sitting on so much unrealized value.... ugh.

post #36 of 128

First I think a partnership with Paypal is bad idea, they are not the most consumer friendly company. 

 

If Apple got into the consumer credit business they have plenty of money to make that happen this could be another review stream for them. maybe wall street will like that. Visa and Master Card have been doing well.

post #37 of 128
Quote:
Originally Posted by reroll View Post

I was going to say something stupid just like this to reach my daily trolling quota but you've beaten me to it 1smile.gif

Not sure if you read that correctly. Three examples: MS, Googs,Sammy
post #38 of 128
Quote:
Originally Posted by Tallest Skil View Post
 

Hey. Wasn’t eBay going to sell PayPal, or was that someone’s wish?

 

Forget partnering. Apple has a history of partners STEALING THEIR INTELLECTUAL PROPERTY. Either buy PayPal or go it alone.

LOL, come on.

 

Month one, Mobile Payments.

 

Month two, PayPal Phone!!

 

I don't think so.

post #39 of 128

I am for this only if Apple's customer service/reputation/quality/dispute resolution trumps that of PayPal's. 

 

PayPal's policies are the worst in the industry. Any industry. Just Google 'PayPal horror stories'. Wait, just Google 'PayPal'. 

post #40 of 128
Another thing Apple could offer sellers is what they do for themselves for iTunes services -- reduce transaction fees paid to the CC Processor.

If you pay for small purchase with a credit card, the seller is charged a transaction fee.

When you pay for a small purchase through iTunes, iTunes (the seller) will often hold the transaction for later processing. The theory being that if you are in the iTunes store, and make a small purchase, it is likely that you will make additional small purchases while in the store. By holding these transactions, Apple can aggregate them into a single transaction with the CC Processor.

It's been a while, but let's assume a CC Transaction costs the seller a $0.25 Transaction Fee (In addition to a percent of the transaction amount).

So, you enter the iTunes Store, browse around and buy 5 Songs for $1.00 each.

If Apple submits 5 separate transactions, Apple would be charged 5 x $0.25 or $1.25 total for 5 songs.

By holding and aggregating these into a single transaction, Apple is charged just $0.25 -- a cost of $0.05 per song as opposed to $0.25 per song
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