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Apple Pay To Challenge PayPal in Online Transaction Market
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At its WWDC 2016 conference, Apple Inc. (AAPL - Free Report) has finally confirmed that it will be expanding Apple Pay to enable web payments with the use of the TouchID scanner.
The company revealed that later this year, users will be able to make payments through Apple Pay’s mobile site on its Safari browser. But this feature will only be available to users having TouchID sensor integrated Apple devices (newer versions of iPhones, iPads and Apple Watch). Mac users will have to generate a notification message for their iPhone to confirm the transaction through fingerprint authentications.
While this expansion will make the transaction cycle much smoother for users (eliminating the need to install the app on each device), it would intensify competition in the market. Specifically, market leaders like PayPal (PYPL - Free Report) and newer entrants like Samsung Pay, Alphabet’s (GOOGL - Free Report) Google Wallet and Amazon’s (AMZN - Free Report) Amazon Payments are most likely to be affected.
Let us consider how Apple Pay may give a tough time to PayPal.
Apple Pay Vs PayPal
So far, PayPal had been enjoying the prime position in the robust digital payments market, taking care of nearly 25% of the global mobile-commerce transactions. But since the last year, the battle for digital wallet (and so for the mobile payments) has started to heat up with big tech players like Apple, Google and others entering the market.
But even then, services like Apple Pay hardly affected PayPal’s business directly so far. This was primarily because of the non-overlapping platforms of these two services. Apple Pay could only be accessed by app users and PayPal was widely used for web transactions.
But now as Apple Pay expands, it will step into PayPal’s territory. After all, one cannot ignore the fact that a number of PayPal users have iOS devices. Per media reports, approximately 20% of PayPal users are overlapping with Apple.
What’s Next?
Apple has indeed upped its game.
By this fall, Apple Pay will not only be available on more platforms but will also be expanded to more key markets. This is definitely a dual-blow for PayPal as it will face cut-throat competition from Apple in the peak holiday season.
But it can also be speculated that PayPal must have already been devising plans to face the Apple attack. After all, rumors regarding this development had started surfacing since March.
Nonetheless, both the companies have their own strengths, which makes it more interesting. On the one hand, PayPal has a first-mover advantage as a result of which it has already accumulated a decent customer base while Apple’s solid brand value and technological prowess does makes it necessary for PayPal to raise the bar.
Again, we are all aware of Apple’s loyal customer base.
Though currently PayPal has a Zacks Rank #3 (Hold) and Apple a Zacks Rank #5 (Strong Sell), things might change on the back of the recent developments.
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Apple Pay To Challenge PayPal in Online Transaction Market
At its WWDC 2016 conference, Apple Inc. (AAPL - Free Report) has finally confirmed that it will be expanding Apple Pay to enable web payments with the use of the TouchID scanner.
The company revealed that later this year, users will be able to make payments through Apple Pay’s mobile site on its Safari browser. But this feature will only be available to users having TouchID sensor integrated Apple devices (newer versions of iPhones, iPads and Apple Watch). Mac users will have to generate a notification message for their iPhone to confirm the transaction through fingerprint authentications.
While this expansion will make the transaction cycle much smoother for users (eliminating the need to install the app on each device), it would intensify competition in the market. Specifically, market leaders like PayPal (PYPL - Free Report) and newer entrants like Samsung Pay, Alphabet’s (GOOGL - Free Report) Google Wallet and Amazon’s (AMZN - Free Report) Amazon Payments are most likely to be affected.
Let us consider how Apple Pay may give a tough time to PayPal.
Apple Pay Vs PayPal
So far, PayPal had been enjoying the prime position in the robust digital payments market, taking care of nearly 25% of the global mobile-commerce transactions. But since the last year, the battle for digital wallet (and so for the mobile payments) has started to heat up with big tech players like Apple, Google and others entering the market.
But even then, services like Apple Pay hardly affected PayPal’s business directly so far. This was primarily because of the non-overlapping platforms of these two services. Apple Pay could only be accessed by app users and PayPal was widely used for web transactions.
But now as Apple Pay expands, it will step into PayPal’s territory. After all, one cannot ignore the fact that a number of PayPal users have iOS devices. Per media reports, approximately 20% of PayPal users are overlapping with Apple.
What’s Next?
Apple has indeed upped its game.
By this fall, Apple Pay will not only be available on more platforms but will also be expanded to more key markets. This is definitely a dual-blow for PayPal as it will face cut-throat competition from Apple in the peak holiday season.
But it can also be speculated that PayPal must have already been devising plans to face the Apple attack. After all, rumors regarding this development had started surfacing since March.
Nonetheless, both the companies have their own strengths, which makes it more interesting. On the one hand, PayPal has a first-mover advantage as a result of which it has already accumulated a decent customer base while Apple’s solid brand value and technological prowess does makes it necessary for PayPal to raise the bar.
Again, we are all aware of Apple’s loyal customer base.
APPLE INC Price and Consensus
APPLE INC Price and Consensus | APPLE INC Quote
Though currently PayPal has a Zacks Rank #3 (Hold) and Apple a Zacks Rank #5 (Strong Sell), things might change on the back of the recent developments.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>