PayPal is preparing to capitalise on Apple’s recent decision to open up its NFC capabilities to third-party developers in the European Union.
This move could allow PayPal to develop its own mobile wallet for EU users, potentially positioning itself as a direct competitor to Apple Wallet.
Apple’s decision to allow third-party access to its NFC and Secure Element APIs, which facilitate contactless payments, aligns with the EU’s new Digital Markets Act (DMA).
This regulation mandates that Apple enable third-party wallets to function as defaults on iPhones, breaking Apple Wallet’s monopoly on iOS-based NFC payments.
During PayPal’s Q2 earnings call, CEO Alex Chriss hinted that the company is preparing to enter the NFC-enabled mobile wallet space, particularly in Europe.
Chriss noted that upcoming changes in NFC regulations would create new opportunities for PayPal, allowing the company to extend its offerings beyond e-commerce into offline retail.
This is not the first time PayPal has alluded to entering the mobile wallet space.
In a previous quarter, Chriss suggested that the new NFC rules would simplify PayPal’s ability to provide a wallet for both Android and iPhone users.
The company has long sought to establish a foothold in offline retail, pursuing partnerships with US retailers, point-of-sale software makers, and credit card companies.
However, Apple Pay has continued to dominate contactless payments in many markets.
PayPal’s potential move into the NFC-based wallet market could be a significant development, especially considering that 90% of Europeans had used PayPal services by 2022.
While Google Pay and Apple Pay currently lead in mobile payments in Europe, the introduction of a PayPal wallet could shake up the competitive landscape.
Although PayPal has not provided specific details about its plans, such as a launch date or operational specifics, Chriss is expected to address these topics at the upcoming Goldman Sachs Conference on September 9.
This event could provide more clarity on how PayPal intends to leverage the newly accessible NFC capabilities in the EU.
As it explores opportunities to enter the NFC-enabled mobile wallet market in Europe, it stands to potentially disrupt the dominance of Apple Pay.
The company’s long-standing ambition to bridge the gap between online and offline payments could finally come to fruition, thanks to the EU’s regulatory environment.
The next steps for PayPal will be closely watched, particularly as the fintech giant outlines its strategy at the forthcoming Goldman Sachs Conference.
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