PayPal May Challenge Apple Wallet in the EU

PayPal is preparing to capitalize on the iPhone’s newly accessible NFC capabilities by creating a mobile wallet specifically for EU users

Apple announced earlier this month that it would permit third-party developers to utilise the new NFC (near-field communications) and Secure Element APIs, which currently facilitate contactless transactions and payments, such as those facilitated by Apple Wallet.

PayPal has not yet explicitly verified that it will develop a competing wallet due to these new APIs; however, the company has broadly indicated that such a plan has been in the works recently.

In response to a question regarding PayPal’s strategy, PayPal CEO Alex Chriss stated during the company earnings call with investors on July 30 that “some “of the changes coming, particularly in Europe around NFC” would” present an opportunity for PayPal and enable it to “be pr” pared shortly to be able to play in that space.”

This”was not the first time Chriss had hinted at a mobile wallet. In the previous quarter, he had more explicitly stated that the NFC changes would make it very easy for PayPal to provide a wallet in an Android or iPhone operating system.”

The “company had previously announced its intention to provide its consumers with “both “online and offline” deli” very options. This indicated that PayPal merchants desired an omnichannel solution that transcended e-commerce.

In this instance, an offline solution is likely to refer to the intention to provide NFC-based transactions through a PayPal mobile application.

Apple will comply with the EU Digital Markets Act (DMA) by allowing consumers to designate a third-party wallet as their default instead of Apple Wallet.

Additionally, this legislation generates new opportunities for app developers, such as distributing applications beyond the App Store, utilising engines, and requesting interoperability with iOS hardware and software features, such as the Secure Element utilised on the iPhone.

It would be a significant victory for PayPal to finally provide a functional mobile wallet, as the company has been attempting to establish itself in the offline retail sector for years.

PayPal has pursued a variety of opportunities over the years, such as partnerships with national retailers in the United States, deals with point-of-sale software and terminal manufacturers, features for paying local shops via its app, acquisitions of mobile wallet technology, the use of QR codes for retailer payments, partnerships with credit cards on offline payments, and tools for merchants selling offline, among others.

Nevertheless, the proliferation of contactless payments has enabled Apple Pay to maintain its dominance in numerous markets.

With an NFC-based wallet, PayPal has an opportunity in Europe, as 90% of Europeans have used its services since 2022. However, Google Pay and Apple Pay were the leaders in mobile payments.

PayPal declined to provide additional information regarding its intentions to create an NFC wallet, including its anticipated launch date and functionality. Instead, it referred to its most recent earnings statements as a source of guidance.

Nevertheless, Chriss is scheduled to deliver a presentation at Goldman Sachs Conference September 9, during which initiatives are expected to be addressed.