PayPal is gearing up to capitalize on the newly opened-up NFC capabilities of the iPhone by developing its own mobile wallet for users in the European Union (EU). With Apple’s recent announcement that third-party developers can now access NFC and Secure Element APIs, PayPal sees an opportunity to create a competing wallet.
During PayPal’s second-quarter earnings call, CEO Alex Chriss hinted at the company’s European strategy, acknowledging that the NFC changes in Europe would allow PayPal to “play in that space.” This wasn’t the first time Chriss had mentioned a mobile wallet, as he had previously stated that the NFC changes would make it “very easy” for PayPal to provide a wallet on Android or iPhone operating systems.
PayPal has been keen on expanding its presence in the offline retail world for some time. The company has pursued various avenues, including partnerships with national retailers in the US, deals with point-of-sale software and terminal makers, and acquisitions of mobile wallet technology. However, Apple Pay’s dominance in many markets has prevented PayPal from establishing itself fully.
The EU’s new regulation, the Digital Markets Act (DMA), presents an opportunity for PayPal to offer a fully-functional mobile wallet. The DMA allows consumers to set a third-party wallet as their default, giving PayPal a chance to compete with Apple Wallet. This legislation also opens doors for app developers, providing more flexibility in distributing apps and requesting interoperability with iOS features.
Having a mobile wallet would be a significant win for PayPal, considering its extensive user base in Europe. As of 2022, 90% of Europeans had used PayPal’s services, although Google Pay and Apple Pay were ahead in terms of mobile payments. By leveraging NFC technology, PayPal can potentially capture a larger share of the mobile payment market.
While PayPal has not revealed specific details about its NFC wallet, such as the launch date or functionality, CEO Alex Chriss is expected to discuss the company’s EU plans at the upcoming Goldman Sachs Conference on September 9. This conference will likely provide more insight into PayPal’s strategic moves in the mobile payment space.
In conclusion, PayPal’s development of an NFC-based mobile wallet for EU users represents a significant opportunity for the company to establish itself in the offline retail market and compete with Apple Pay. By leveraging the newly opened-up NFC capabilities of the iPhone, PayPal aims to provide a fully-functional mobile wallet that can serve as an alternative to Apple Wallet. With its strong user base and the regulatory changes in the EU, PayPal has a chance to make a significant impact in the mobile payment landscape.
