Technology of the Week, PayPal v.s. Apple pay
PayPal v.s. Apple pay team 32
For our technology of the week we compared the business models of PayPal and Apple pay. These particular companies have been chosen because they both provide innovative payment solutions that eliminate the need for physical payment cards. PayPal is an already worldwide known online transaction provider which is probably familiar for the majority of us. Apple pay is a recently released mobile payment provider, which is not yet available in the Netherlands but has high expectations to live up to on a global scale. Where PayPal has already established its position in both B2B and B2C market, Apple pay has to face a lot of competition on the mobile payment B2C market. Customers of payment services are considered to be reasonably loyal, which makes this market highly competitive. Additionally, technology upgrades of instore payment panels and mobile devices are required for Apple pay to be able to provide their service on a large scale.
Similarities of both companies can be found in their value proposition. Both aim to provide simple, flexible, low cost, convenient and secure payment possibilities. We are convinced that both solutions are simple and convenient but some aspects of both companies are not that clear. Since there is much theft and fraud in this industry, both PayPal and Apple pay need a strong security against this. A difference in privacy security is that PayPal stores all transaction information and Apple does not. Privacy is a hot subject of discussion and could be or become a reason why people prefer one service over the other. Additionally, these two companies have totally different revenue models. PayPal earns its revenue from transaction fees and the revenue of Apple pay consists of interchange fees. This is the strength of PayPal to obtain their position.
As both companies come from different backgrounds, they have the same goals. PayPal has launched an updated app for iOS and Android that expanded its mobile app capabilities by allowing users to search for local shops and restaurants that accept PayPal payments. Since they have the largest market share, they need to keep innovating themselves to stay ahead. One essential task which they can improve is the customer service that is currently lacking.
Apple is wide known and has a strong brand image. However, some of the few constraints Apple faces are the availability of price. Apple should make Apple pay available for all their devices if possible, but also lowering their hardware prices will trigger customers to buy their products. If Apple succeeds in this, they will become and sustain the largest market share in the smartphone industry. Finally, reassessing their revenue structure can enable Apple pay to enter different markets.
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