Market Overview

An Apple Peer-To-Peer Payment System Is Scaring Paypal Investors

An Apple Peer-To-Peer Payment System Is Scaring Paypal Investors
  • Shares of Paypal Holdings Inc (NASDAQ: PYPL) lost more than 1 percent in Thursday's pre-market session, adding to Wednesday's 1.81 percent decline.
  • Reports came out on Wednesday that Apple Inc. (NASDAQ: AAPL) is working on a peer-to-peer payment service.
  • Apple is in talks with banks over the new service, which could compete against Paypal's already existing peer to peer payment service.

Paypal has historically benefited from its dominant market position, with some data pointing to as much as a 91 percent market share of the entire payment gateway segment.

However, Paypal's dominance and lack of formidable competitors may come to an end as an industry titan is eyeing a massive expansion into Paypal's territory.

Related Link: Citi Looks At PayPal Following Apple P2P Report

Shares of Paypal lost nearly 2 percent on Wednesday after various media publications announced Apple is working with banks to create a peer-to-peer service that allows iPhone owners to send each other money from their Apple Wallet.

Apple has already made its ambitions clear: The company wants to replace consumers' wallets with their service. Apple Pay was initially launched in October 2014 and expanded to include Passbook, an app that stores digital tickets and rebranded the product as Wallet.

According to Business Insider, Apple has actually been "quietly" putting together a plan to kill Paypal since 2014 when the company began forging relationships with credit card providers. The publication cited a Baird Equity Research analyst who noted that Apple is "the most legitimate potential threat" to Paypal's strong position, especially with respect to the point of sale segment of mobile payments.

Posted-In: Apple Pay Apple Wallet Baird Business Insider Mobile TransfersNews Tech Media Best of Benzinga


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