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Apple's rumored iPhone 6 mobile payment system seen as 'most legitimate potential threat' to PayPal

post #1 of 22
Thread Starter 
Apple's upcoming product releases will lay the groundwork for an aggressive leap into the mobile payments sector that could eventually erode PayPal's firm foundation, according to one research analyst.

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Apple is reported to have already inked deals with American Express, MasterCard and Visa for a digital payment system for iPhone 6, to be unveiled on September 9.

Baird analyst Colin Sebastian issued a note calling Apple's rumored "iWallet" the "elephant in the room," noting that, "while there is no shortage of competition in payments, we view Apple as perhaps the most legitimate potential threat to PayPal's strong position."

The market for mobile payments is expected to reach $1 trillion worldwide by 2017, according to data from IDC.

Among other recent entrants, including Amazon, Google and eBay, Apple "has a strong base of existing customers that it could leverage for mobile payments," Sebastian observed. Apple now has more than 800 million iTunes accounts, most of which are tied to credit cards.

"We believe Apple's closed-platform, software expertise, and brand power position it well," Sebastian wrote. "Additionally, integration with its anticipated wearable device could be a key feature. We believe mobile payments could be a significant opportunity.""We view Apple as perhaps the most legitimate potential threat to PayPal's strong position" - Baird analyst Colin Sebastian

In addition to having lots of active iTunes and App Store accounts, Apple's customers also represent the most valuable segment of buyers.

Despite vast "market share" volumes of Android users, IBM announced last year that Apple's iOS was being used to do the most mobile shopping by a wide margin, from the important American Thanksgiving Black Friday throughout the Christmas holiday season.

Analyzing terabytes of data from 800 retail sites, IBM reported that iOS devices accounted for more than five times the total sales of Android devices. The firm also said that iOS users spent an average of twice as much per order.

IBM subsequently entered into an exclusive partnership with Apple to use the new Swift programming language to develop over 100 custom apps targeting the needs of enterprise users in specific markets.
post #2 of 22
And, if true, thank God.

The sooner we find a less greedy replacement for PayPal the better.

And while we're at it, somebody step up and bring some more competition to the search and auction arenas as well.
Edited by GTR - 9/3/14 at 11:11pm
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post #3 of 22
The biggest threat to PayPal is their own awful, convoluted, stagnant system. It's like a throwback to 1995.
post #4 of 22
Quote:
Originally Posted by GTR View Post

And, if true, thank God.

The sooner we find a less greedy replacement for PayPal the better.

And while we're at it, somebody step up and bring some more competition the search and auction arenas as well.

WTF are you talking about? I use PayPal on almost a daily basis, and it doesn't cost me a goddamn penny?!?!
Some of you people like to complain about everything
post #5 of 22
I'd like a payment system that does not include MasterCard or Visa. That would be progress.
post #6 of 22
Quote:
Originally Posted by MagnetPhreak View Post

WTF are you talking about? I use PayPal on almost a daily basis, and it doesn't cost me a goddamn penny?!?!
Some of you people like to complain about everything

Sorry, but buying something on eBay, paying via PayPal then copping fees for both services has always irritated me.

Are you against the idea of more competition for PayPal?

Surely that will benefit everybody?
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post #7 of 22
Quote:
Originally Posted by MagnetPhreak View Post

WTF are you talking about? I use PayPal on almost a daily basis, and it doesn't cost me a goddamn penny?!?!
Some of you people like to complain about everything

Hmm, well actually PayPal, in some instances, is a free service but most times it acts just like a credit card. And those free services are paid for by the services that charge a fee.

You the consumer may not see the fee but most transactions cost the accepting business about 3% + a flat transaction fee. Credit cards and PayPal are a convenience but do have costs. The business can eat the cost but many times passes that on to the consumer. All merchant accounts (credit card processing) works this way. Not saying it is right or wrong but to say it doesn't cost anything is not true. The real question is if disruptive competitors and/or payment models (Square, Bitcoin, etc.) can charge a lower fee and survive financially. Time will tell. I like PayPal but they could be more aggressive in their fee structure.
post #8 of 22

"...according to data from IDC. "

 

lmao :lol: 

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Paul Thurrott on iPad (2010): "Anyone who believes this thing is a game changer is a tool. I'm sorry, but that's just the way it is."

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post #9 of 22
You can't blame Apple for signing agreements with the big credit card companies but MasterCard especially has been selling your data all over the place and even brags about it. All your transactions are bought by health insurance companies. Just an FYI, even a hospital now is buying up Mastercard records...it's a bit out there so anyway the credit card folks can get more data, they are doing it. I try to stay with cash and yes the PayPal charges do get to me too but at least my credit card number is protected that way.
post #10 of 22
Great to see you back, Dilger. Hope you had a good holiday.
"If the young are not initiated into the village, they will burn it down just to feel its warmth."
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"If the young are not initiated into the village, they will burn it down just to feel its warmth."
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post #11 of 22
Quote:
Originally Posted by GTR View Post

Sorry, but buying something on eBay, paying via PayPal then copping fees for both services has always irritated me.

Are you against the idea of more competition for PayPal?

Surely that will benefit everybody?

I still have to agree disagree with you. You expect these companies to provide the service for free? This is about providing the payment service, which PayPal does quite conveniently and securely. Yes I agree they're always does need to be competition that way it does drive the price down. There will definitely be some exchange of money for the service! But using PayPal as a payment service I have never been charged one cent!!!
post #12 of 22
Quote:
Originally Posted by waldobushman View Post

I'd like a payment system that does not include MasterCard or Visa. That would be progress.

That doesn't even make sense!! It's just a way to simplify the payment process MORE SECURELY!!!
post #13 of 22
Quote:
Originally Posted by MagnetPhreak View Post

I still have to agree disagree with you. You expect these companies to provide the service for free? This is about providing the payment service, which PayPal does quite conveniently and securely. Yes I agree they're always does need to be competition that way it does drive the price down.

Of course I don't expect them to provide services for free. But I'm also not going to give them my money for free either. Why should we pay so much when a computer does all the heavy lifting? Twice.

I look forward to the competition providing similar convenience and security that will benefit users of any and all services.
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post #14 of 22
I hope it includes the ability to send money directly between two parties, like PayPal, and not just used at stores... especially free when sending money among family members.
post #15 of 22
Quote:
Originally Posted by waldobushman View Post

I'd like a payment system that does not include MasterCard or Visa. That would be progress.

 

I imagine Apple could fairly seamlessly cut out the middlemen in the future if they had to, or at least leverage the threat of doing so to the benefit of consumers.

post #16 of 22
Quote:
Originally Posted by Benjamin Frost View Post

Great to see you back, Dilger. Hope you had a good holiday.

Yep, it's been pretty DED around here. Or, should I say, like the land of the unDED.
post #17 of 22
Quote:
Originally Posted by MagnetPhreak View Post


WTF are you talking about? I use PayPal on almost a daily basis, and it doesn't cost me a goddamn penny?!?!
Some of you people like to complain about everything

 

Obviously you never receive money via Paypal.


Paypal make a huge chunk of their money from transactions involving currency conversions.  They shaft users on that one by the considerable difference between their exchange rate and the CC/bank exchange rates.  They then also charge unconscionable fees on top of that.

 

If I wanted to buy something in Australia costing AU$1000, paying in Euros, Paypal would charge me €742 in terms of just the currency conversion.  They would then also charge an additional 4.4% so the total cost would be €775.

 

If I were to use my Visa Debit card, my bank would charge me €721 for the currency conversion - €21 less than Paypal because Paypal use exchange rates even more heavily weighted in their favour than do banks.  They would then charge an additional 1.75% fee capped at a max of €11 so the total cost would be €732 - €42 less than Paypal would charge.

 

The actual inter-bank exchange rate is actually €713 so Paypal are probably getting that rate on the transaction so are making €62 on such a transaction - plus all the charges they would extort from the recipient receiving the funds.

 

I try and avoid using Paypal for anything except small transactions, for obvious reasons.  Buyer protection is their only saving grace.  I don't see Apple offering buyer protection so I think Dilger and the analist are both talking out their collective arses, because that, apart from eBay integration, is the main reason a lot of people use them.

post #18 of 22
Quote:
Originally Posted by AppleInsider View Post

Apple's upcoming product releases will lay the groundwork for an aggressive leap into the mobile payments sector that could eventually erode PayPal's firm foundation, according to one research analyst.
 

You spelled "retard" "analyst". I used to work in the financials world, before the crash. I was on tech calls with these guys all the time. They have *no clue*. Here's how it works. You look at numbers in their financial statements and calculate a few TLAs. Then you make hand waving statements about things like the Apple TV and how it would mean this much cash which would change the TLA by X amount. Rinse, repeat. You don't have to, or actually do, know anything whatsoever about tech, and your predictions can be absolutely baseless. No one *in* the market gives a crap, because they don't know either.

 

I've used PayPal *maybe* once in the last year. I use my NFC credit card at least once a day. While it's true that the CC companies haven't figured out web site payments, it's equally true that PP hasn't figured out IRL payments. There's no direct comparison between the markets, and I see exactly zero evidence Apple is going after PP's turf. Sure, such a thing might block PP's future expansion IRL, but so is the entire world.

post #19 of 22

I find it disconcerting that this "analyst" does not at least mention the possibility of the opposite result, that is a collaboration between Apple and PayPal.

In January, for example, Jason del Ray writes for Recode: PayPal Wants Role in Apple’s Mobile Payments Dreams.

I have no idea how this would work for interest of Apple, but it is an idea that might fuel another great article from Daniel!

 

http://recode.net/2014/01/30/paypal-wants-in-on-apples-mobile-payments-dreams/

post #20 of 22
Quote:
Originally Posted by MagnetPhreak View Post


I still have to agree disagree with you. You expect these companies to provide the service for free? This is about providing the payment service, which PayPal does quite conveniently and securely. Yes I agree they're always does need to be competition that way it does drive the price down. There will definitely be some exchange of money for the service! But using PayPal as a payment service I have never been charged one cent!!!

 

You have, in fact, been charged extra, because the businesses you buy from have raised their prices to account for the fee. You may not /see/ the fee as a discrete line item on your bill, but it's there. You will start noticing the fee more if you ever sell anything, such as auction items on EBay, commissions or anything else.

post #21 of 22
Quote:
Originally Posted by aiposter View Post


Hmm, well actually PayPal, in some instances, is a free service but most times it acts just like a credit card. And those free services are paid for by the services that charge a fee.

You the consumer may not see the fee but most transactions cost the accepting business about 3% + a flat transaction fee. Credit cards and PayPal are a convenience but do have costs. The business can eat the cost but many times passes that on to the consumer. All merchant accounts (credit card processing) works this way. Not saying it is right or wrong but to say it doesn't cost anything is not true. The real question is if disruptive competitors and/or payment models (Square, Bitcoin, etc.) can charge a lower fee and survive financially. Time will tell. I like PayPal but they could be more aggressive in their fee structure.

 

this.  The fees are a cost of doing business.  Those are paid by the company and are paid for out of their funding source: revenue from their customers.  eBay is the same, and paying PayPal the fees is paid for out of their revenue stream which comes from you, the consumer.  Hidden costs, but real and paid nonetheless.

 

Overhead is always factored into pricing.

You did not come into the world to fail. You came into the world to succeed.

- Gordon Hinckley

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You did not come into the world to fail. You came into the world to succeed.

- Gordon Hinckley

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post #22 of 22
i was actually beginning to enjoy appleinsider again without the "writing" from Daniel Eran Dilger, i thought , well i wished he would've retired or got fired from appleinisder. but sighhh, sadly he is back 1frown.gif
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