Will Apple Pay take over PayPal?

Along with releasing its highly anticipated large screen smartphones, Apple also announced its mobile payment feature called Apple Pay which works through the NFC chip present in the company’s current flagship smartphones. This highly convenient feature will allow consumers to enter their credit/debit card details and securely store them on their phones to allow for quick and painless transactions when they are checking out their items at stores (the transactions will take place at ‘point of sale’ locations obviously). With smartphones becoming an omnipresent entity, will Apple’s mobile payment feature take over the formidable PayPal? Let us note down some of the reasons why there is a high probability that Apple might be the new king of online transactions.

Apple Pay v PayPal

1. Abundant number of iTunes accounts

According to Bloomberg, there are approximately 800 million registered iTunes accounts. How exactly do you start using the Apple Pay feature? By making an iTunes account and following the instructions from there. That means that theoretically, Apple has the potential of accumulating over a billion Apple Pay users in the coming years, and that will only spell disaster for PayPal. Over the years, Apple’s security has remained robust while others have faltered, which only makes credit card users even more susceptible to start using Apple’ NFC payment feature.

2. Making NFC payments is more secure compared to other methods

What do online customers require more than anything else in this overly grown web of online payments? Security of their funds. The ubiquity of making online transactions has increased exponentially, indicating how consumers are shifting their focus from making payments using cold, hard cash to punching in their card numbers to execute the same procedure. However, the popularity of making online transactions is not without flaws. Making payments through a public WiFi hotspot or a Bluetooth connection is thoroughly volatile in terms of security. This is where NFC is able to triumph both forms of connectivity; which is security. Apple has already announced an API (application programming interface) for Apple Pay so that developers can take advantage of it by stuffing in additional features that will make the security robust and the payment process even more flexible.

Still, incorporating an NFC chip in to the iPhone 6 and the iPhone 6 Plus took a very long time. Why did that happen? Because since NFC’s main functionality is to transfer data by pairing two devices together, Apple did not feel that such a feature was so important as there are tons of ways data can be transferred wirelessly. Furthermore, another reason why the NFC chip took so long to be incorporated in to the iPhone 6 and iPhone 6 Plus was because only 3.9 million NFC payment terminals were shipped in 2012, and since the market was not aware that NFC could be used for payment purposes, Apple refrained from adding such a feature. Another statistic to take note is that smartphones boasting the NFC chip recorded a sales figure that was 300 percent higher in 2012 than it was in 2011. This allowed Apple to capitalize when the market started gaining substantial knowledge about NFC connectivity and how exactly it works.

3. The combination of Apple’s TouchID and NFC payments is formidable

Initially, the level of security present in Apple’s patented TouchID interface was so easy to breach that Apple had to ameliorate the security situation with its new iteration of devices. Since then, the TouchID interface has gone through several revisions that has allowed it to make mobile users confident of the level of security present inside the interface. Also, the potent combination of Apple’s TouchID interface and Apple Pay has brought about a whole new echelon of mobile security. Using normal security protocols such as a 4 digit passcode is easily penetrable and if a user’s sensitive card credentials are present on that device, then those details can easily be stolen if the device gets in to the wrong hands.

However, combine a TouchID interface and the Apple Pay feature, and thieves will not be able to access your credentials without your fingerprints. The TouchID interface has also allowed other companies such as the Cupertino tech behemoth’s closest adversary in the smartphone industry, Samsung, to start following the same suit when it comes to fingerprint sensors. However, thanks to the amount of Apple’s proficient developers coupled with a more affluent demograph, Apple clearly has the advantage when it comes to biometric security.

4. Apple has had a great year with its large screen iPhones

The company had reported that it sold more than 10 million new iPhone 6 and iPhone 6 Plus devices in just three days since launch. That sales record surpasses the previous held record of the company’s iPhone 5s and iPhone 5c. What is even more amazing to note here is that Apple had not even begun shipping its units to China, where there has been an influx of demand for the phablet size iPhone 6 Plus. In fact, there was such a disparity between supply and demand of the iPhone 6 Plus, that the company was reported to be paying Foxconn, the company chief device assembler $24 per iPhone 6 Plus assembled instead of the initially agreed amount of $20. Analysts have also predicted that Apple is also going to have an even better financial period in 2015 thanks to its larger screen iPhones. Those statistics are enough to satisfy the speculation that Apple is going to be a force to be reckoned with when it comes to mobile payments. As more and more iPhone 6 and iPhone 6 Plus units gets sold, chances are that Apple will exponentially be increasing its mobile payment circle, enough to threaten PayPal.

Irrespective of how well Apple is in dominating the mobile payment universe, PayPal will most likely have an ace up its sleeve, which it will showcase in the future. Currently, Apple has four times the reach that PayPal (due to 800 million registered iTunes accounts) has and although the payment processing company has forged partnerships with restaurants and retailers, Apple still has the upper hand thanks to its reach. However, we are still extremely confident that PayPal will come up with something that will challenge Apple’s supremacy but for now, Apple is the undisputed king of mobile payments.

Leave a Comment

Your email address will not be published. Required fields are marked *


Recent Posts


We accept SADAD Account now at PayTabs!

Saudi-based merchants can now allow customers to conveniently and securely pay on their website...


Our newest ecommerce product is here!

After long months of developing to perfection, it is with great pride and excitement we announce...