A big part of PayPal’s recent success has been creating smart alliances with larger competitors. Most notably, the company stopped warring with Visa and Mastercard soon after its split from eBay. That decision has been a boon for business.
PayPal was able to fend off attacks from the card giants, but it now has a new challenge coming from the world’s largest company. Apple announced Monday that it would integrate its own peer-to-peer payment functions into iMessage in its next mobile operating system. The move basically pits Apple directly against PayPal’s Venmo.
PayPal sounds unconcerned about Apple’s latest move. “We welcome any development that helps people address the awkwardness of dealing with cash when paying friends or family back,” a company spokesperson told Barron’s Next via e-mail. “The news that more financial institutions and companies will be introducing similar services will only bolster the central role of smartphones in our day-to-day lives.”
The millennials who love using Venmo may not stray from the “cool” service they’ve grown accustomed to using. (Venmo has a social component where you can see who your friends paid as well as hints of what they paid for, and that’s something Apple Pay won’t have.) But given that Apple’s peer-to-peer platform will be built into all phones running iOS 11, it’s likely to have an easier time attracting users well beyond the early-adopter set of millennials.