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ApplePay wants a bite out of PayPal’s mobile payment volume

PayPal stock dipped on Thursday by 4.7%, as investors reacted to reports that Apple Pay may soon encroach on its business with upcoming website integration.

Re/code reported Wednesday that Apple’s digital payments service will expand to websites later this year and will be available to shoppers using Apple’s Safari browser on iPhone and iPad models that feature Apple’s Touch ID fingerprint technology.

Why this matters
Although Apple Pay’s in-store checkout service gets most of the attention, it’s not that much easier than whipping out a credit card. By comparison, buying things online is more of an ordeal, requiring you to find your credit card (or commit the number to memory) and enter a whole bunch of payment information. And from a privacy perspective, it may be harder to trust some random website than a store you can physically walk into. Bringing Apple Pay’s convenience and privacy safeguards to the web would make it a lot more useful than it is now.

Furthermore, an expansion of Apple Pay to mobile browsers would put the service in closer competition with PayPal, which offers a quick checkout option on more than half of the top 500 online retail websites. Still, even PayPal requires users to enter their login details before they can start buying. Apple’s hardware and software integration would likely give it an immediate edge, as scanning a fingerprint would be simpler and faster.

Piper Jaffray analysts noted roughly 30% of PayPal’s total payments volume in 2015 came from mobile devices, estimating that at least 20% was from Apple iOS devices. That portion of the payments volume is at risk over the next several years, they said.

Tags: PayPal, payments, Apple Pay

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