Investors may be concerned about the threat that Apple Pay poses to eBay’s PayPal unit, but the impact may be less negative than many assume, according to the Wall Street Journal.
The next few months will likely see millions of iPhone 6 buyers in the U.S. trying out Apple’s mobile-payments system, which uses the phone’s contactless communications and fingerprint authentication technology. But while major retailers have signed up to support Apple Pay, the feature won’t be available on Apple’s older phones, so adoption will depend on existing users upgrading to the newer models.
And while some merchants have installed Apple-specified point-of-sale terminals to support Apple Pay, Visa and MasterCard have already mandated that merchants upgrade to terminals that can accept cards with embedded chips by next October. That reduces merchants’ incentive to limit payment options on those terminals to a single player.
PayPal launched its own in-store mobile payments service in 2012, but it’s still not a significant contributor to the company’s business — eBay CEO John Donahoe said in July that the service was still using a “test-and-learn approach.” However, the lack of uptake, means PayPal doesn’t have a lot to lose in in-store payments.
The broader mobile e-commerce market is more important for PayPal — an area where PayPal is already well-established, and where eBay’s mobile-enabled e-commerce volume rose in Q2 by 68 percent year-over-year to $12.3 billion, making mobile about 20 percent of the company’s total e-commerce volume.
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