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Is Paypal Holdings Inc (PYPL) in Trouble with Apple Pay’s Move to Web Browsers?

Last week came as a game changer for Paypal Holdings Inc (NASDAQ:PYPL) as it was revealed that Apple Inc.(NASDAQ:AAPL) was expanding its own mobile payment service, Apple Pay beyond the app.

Apple, it seems, has been secretly working on the integration of Apple Pay with its Safari browser. The company is cleverly using its TouchID sensor integrated iPhones and iPads to enable users to make transactions via Apple Pay’s mobile site on Safari.

So far, PayPal’s business was not directly affected by Apple because both payment services were using non-overlapping platforms. That is Apple Pay could only be accessed by app users in newer iOS devices while PayPal derived a significant portion of revenues (over 30% in 2015) from transactions through its mobile website.

Now as Apple Pay is evolving, it is likely that it will take a share of PayPal customers, especially those with iOS devices. Media reports suggest that nearly 20% of PayPal users are overlapping with Apple.

Before the entry of Apple, PayPal had been enjoying the prime position in the booming digital payments market along with a handful of other players like Alphabet’s Google Wallet and Amazon’s Amazon Payments. In 2015, PayPal handled nearly 25% of the global mobile-commerce transactions, per media reports.

Things could change very rapidly for PayPal as Apple gears up to expand its service in order to expand its share of the market. The service, which has already been expanded to a number of important markets, is now available on more platforms and devices.

Add to this, Apple’s solid brand value and technological prowess and we might as well say that PayPal may have some rough time ahead. Nonetheless, PayPal still has a first-mover advantage as a result of which it has already accumulated a decent customer base.

Apple Pay is expected to be made available on mobile web as soon as this holiday season.

Apart from mobile, rumors are rife that the company is also planning to roll out the service for desktop users as well. However, it is not an immediate concern for PayPal as the iPhone maker still needs to figure out a way to integrate TouchID in its desktop devices or bypass the requirement of these sensors during transactions through Apple Pay.

Given this overhang, PayPal shares are likely to remain range-bound through the rest of the year.



  • PayPal is in trouble, across the board …

    Notwithstanding the otherwise constant stream of disingenuous and delusional nonsense that flows from eBay/PayPal, the share price history of these two clunky operators demonstrate the reality …

    Aug 2007: (pre John Donahoe) EBAY ~$40; AMZN ~$40;
    Jul 2015 (pre eBay-PayPal split): EBAY ~$66; AMZN ~$480;
    Jul 2015 (post-split): PYPL ~$37; EBAY ~$28; AMZN ~$530;
    Currently: PYPL ~$39; EBAY ~$24; AMZN ~$583—LOL …

    PayPal is standing still, and eBay is effectively going backwards—at a rate of knots …

    And, notwithstanding the “spin-off” of PayPal from eBay, eBay and “PreyPal” remain effectively joined at the hip—for at least the next five years—and anyone that thinks otherwise is simply uninformed; and, thanks to a continuation of most of the destructive policies introduced over the eight year reign (2007–2015) of the “Pain from Bain”, John Joseph Donahoe II, the eBay marketplace is continuing on its slow journey down the toilet; nevertheless, during Johnny Ho’s occupation of the eBay corner office, this cretin and his gang of hand-picked Keystone Kops still managed to obtain for themselves massive, unearned, “performance” bonuses—while the company’s “long” shareholders received not one penny.

    PayPal is a clunky, non-bank-licensed, non-deposit-insured, virtually non-regulated, “pretend” bank; a higher fee-charging payments intermediary that, in the main, rides on the back of the world’s banks’ existing payments systems, with no formal agreement with those banks other than PayPal’s operating of a credit card merchant account facility with, and the making of direct debits/credits on some users’ bank accounts via, one of those real banks.

    PayPal is, in its own words, “a merchant of sorts”, it is not a licensed “bank”; virtually everything that “PreyPal” does is done via “marketing” arrangements with licensed financial institutions—for example, look for the identity of the actual credit provider (in the micro print) on their credit providing instruments …

    Funds received via “PreyPal” are at risk of being subjected to arbitrary holds; funds left “on deposit” with PayPal are not FDIC-insured. Even more perilous (for PayPal’s shareholders), the great majority of PayPal’s business originates from its (still) effectively mandated place on the eBay marketplace, so it logically follows that—with the destructive Johnny Ho-Ho-Ho now sitting at the head of the PayPal boardroom table—”PreyPal” will undoubtedly be accompanying eBay on its journey to the sewage farm.

    The reality is, PayPal’s parasitic, higher fee-charging payments operation has little long-term future, outside of its mandated place on the atrophying eBay marketplace, now that professional online/mobile payments offerings from MasterCard (“MasterPass”) and Visa (“Visa Checkout”) are available to any online merchant that has (or can obtain) a credit card merchant account with a real bank.

    And, with respect particularly to “mobile” payments, notwithstanding Apple Pay’s disappointing initial showing, methinks Apple Pay, Samsung Pay, Android Pay, “MasterPass”, and “Visa Checkout”, that is, those operators that have formal relationships with the world’s retail banks and MasterCard/Visa, will soon enough throttle the flow of oxygen to a great deal of the clunky PayPal’s parasitic operations.

    PayPal users should never give PayPal an authority to direct debit their bank accounts; PayPal should only ever be given access to funds via a real-bank credit card account; that way your credit card-issuing bank will be the final arbiter of any transaction dispute; similarly, sellers should never accept payment via PayPal for goods that are going to be picked up by the buyer; PayPal offers sellers zero protection from scammers in such circumstances.

    PayPal’s one-time adoptive parent, eBay, is likely the most unscrupulous commercial entity operating on this planet; but, have no fear, eBay is an equal-opportunity fraudster; demonstrably, they will knowingly aid and abet the defrauding of buyers by unscrupulous eBay merchants who bid on their own auctions, and, conversely, of honest sellers by unscrupulous buyers—as long as there is a financial benefit in such fraud for eBay.

    And if anyone thinks that the clunky “PreyPal” is any more scrupulous—given their equally poor customer service and lack of any mediation of transaction disputes by human beings, which effectively results in a hard-wired bias towards buyers/payers that they now necessarily have to pander to—good luck to all you small online merchants who may get burned in the process …

    The ugly reality of eBay’s calculated, demonstrable, facilitation of endemic shill bidding fraud on consumers on its auctions marketplace—Google “Shill Bidding on eBay: Case Study #5”

    Goodbye clunky PayPal—it’s not been nice knowing you—Google “Retail Payments: The Reality”