Apple and PayPal operated completely separately from each other for a long time. It was not possible to integrate PayPal with Apple Pay on your smartphone and vice versa, PayPal does not accept Apple Pay as an option. Until now. We are entering a new era for payments and transactions, where the two services can be integrated in multiple ways.
The two technology giants now make it possible to use PayPal’s various payment options, including the popular Venmo, within Apple Pay. And the deal also goes the other way: users who are logged into their PayPal account or using the app can now use Apple Pay for (almost) all transactions.
Why are Apple and PayPal working together now?
The obvious question is this: why do the two companies decide to integrate their payment methods together after so much time? One reason is to ensure that customers can pay smoothly on both sides. It’s super frustrating not being able to use your own money and having to switch apps, especially when you’re in a hurry.
Despite efforts to keep users within their own ecosystems, companies have realized that making it as easy as possible for consumers, not trying to keep them in a cage, is the best choice.
PayPal is used for a range of payments, whether you want to buy something at Bol.com or buy tickets for a sporting event. And PayPal is also super useful for consumers who want to buy goods and services from abroad, for example. Instead of having to pay for currency fees or conversions, account holders can hold different currencies in their PayPal account.
Here’s a good example of this: PayPal works well with services such as online casinos, which are often open to users from many countries but are limited to a single currency. Paying by credit card in such cases would be quite expensive, for example. That’s why casinos with PayPal as a payment option now very common.
PayPal is also very secure compared to traditional bank cards. When making payments you do not need to provide payment details, you just need to log in. And all payments are protected, just in case. Gamblers, who often have more than one account at online casinos (often because of the many bonuses), therefore prefer PayPal, rather than having to give their card details to many companies.
Now you see why PayPal dominates payment processing, with a market share of over 40%. The biggest competitor in the US is Stripe, which lags behind by more than 20%. And Apple Pay is not a competitor at all, at least not directly.
Expanding and calling a truce will benefit both parties, with customers able to take advantage of the features that both Apple and PayPal offer. You could say it’s a Match Made in Heaven is.
For Apple Pay, it’s an effort to get more users to switch from their trusty debit cards to their smartphones. Especially in the United States, mobile wallets are still not a popular payment method. There is still some resistance among consumers, unlike most European countries, meaning that integrating additional payment methods such as mobile wallets is a strategic step to grow Apple Pay’s user base.
Credit and debit cards in your Apple Wallet
How exactly does this work? Well, it’s not just a matter of logging into your PayPal account via your Apple Wallet or something like that. Instead, users will need a credit or debit card from PayPal or Venmo (this service is popular in the United States).
If you have one or more cards from one of these services, you can easily add them in the same way as any other bank card. You can scan your cards or add the data manually.
Payment is completely simple. You can double-click the side button to make an in-store purchase, which you then verify with Face or Touch ID (depending on your iPhone model). For online or in-app purchases, you can choose the Apple Pay button and follow the instructions from there.
Considering how popular PayPal is, this will help Apple Pay increase their transactions. In the Netherlands alone the company already has 2.5 million users. This integrated approach will certainly lead to an increase for both tech companies.
Rewards are still possible!
The reason many people continue to use PayPal or Venmo cards outside of other payment solutions is that they want to keep their transaction rewards. If you use the PayPal card with Apple Pay, this is still possible, so don’t worry.
For example, the PayPal Cashback Credit Card allows users to earn 2% on every purchase. The debit card, on the other hand, earns PayPal Rewards points, which can then be used for cash, discounts or other rewards.
The Venmo Credit Card, used by many US consumers, gives users up to 3% on every transaction. Although it is not currently possible for Dutch consumers to sign up, this could happen very soon. Consider, for example, that the Netherlands is the fifth largest e-commerce market in Europe.
And what next?
According to the Algemeen Dagblad Apple Pay ensures that the traditional bank card becomes extinct. For example, look at the market introduction of ING cards on Apple Pay; after a few months you already had more than 1 million consumers using the service.
The partnership between PayPal and Apple will further this trend. Apple Pay is a few years behind in our country compared to the US, where it was first released, but is now well established.
With this new partnership, you can expect even more options in the future. For example, will we ever see Bitcoin as a payment option on our Apple wallets? Time will tell, but it may seem even unavoidable.