Apple Pay, Apple Inc. (NASDAQ:AAPL)‘s new mobile payment platform which was unveiled just yesterday could be a cause for concern for the eBay Inc (NASDAQ:EBAY)‘s PayPal. Maggie McGrath, a member of the Forbes‘ staff shed some light on the seemingly intertwined fates of the two companies.
McGrath drew attention to the immediate increase of 4.5% in Apple Inc. (NASDAQ:AAPL)’s shares upon Tim Cook’s Apple Pay announcement, while eBay Inc (NASDAQ:EBAY) sank 2%. As of right now, shares of Apple are currently up 0.27% while eBay is down 3.4%.
However, in reality, both businesses are not set on a collision course according to Citi Research’s Mark May, cited by Forbes. By analyzing PayPal’s second quarter earnings report, May identified that only $7.6 million of its revenues might be at risk from Apple Pay. This is a meagre 0.4% of the company’s total revenues. On top of that if Apple Inc. (NASDAQ:AAPL)’s mobile payment feature does gain considerably and changes people’s attitude towards mobile payment, May said that eBay Inc (NASDAQ:EBAY)’s PayPal could gain as much as $15 billion in volume owing to its own Near Field Communication (NFC)-based payment feature.
In August, eBay Inc (NASDAQ:EBAY) released its ‘One Touch PayPal’ feature, which unlike Apple Inc. (NASDAQ:AAPL)’s Pay doesn’t rely on the NFC technology where the phone only has to be tapped at the payment terminal, but it still only requires one touch on the Paypal’s app for the payment to get through. However, with the massive Android platform to innovate on, it won’t take eBay Inc (NASDAQ:EBAY) too long to come up with its answer for NFC.
Hence, the $58 billion that Apple Inc. (NASDAQ:AAPL) is aspiring to bring in with this feature by 2017, which, by the way, is a huge increase from the $1 billion mark that this mobile payments market amounted to in 2003, according to a note from Citi Research, cited by Forbes, will have to be shared with eBay Inc (NASDAQ:EBAY) owing to popularity of the Android platform.
The toughest thing right now is however to change the consumer sentiment. Most Americans are averse to mobile payments currently with the The Home Depot, Inc. (NYSE:HD)’s breach of security and the iCloud hack recently. In data provided by Creditcard.com, cited by the source, 30% of the tech savy youngsters don’t see them using their mobile phones for payment purposes and neither do the 65% people in older age bracket. However, by including American Express, MasterCard and Visa and also the availability of 220,000 merchant locations where Apple Pay can be used, Apple Inc. (NASDAQ:AAPL) might be able to change the minds of its customers.