- Apple now accepts PayPal for payments on iTunes, the App Store or Apple Music while using one of the brand's mobile devices, according to a blog post by PayPal. The feature is now available for iOS users in the U.S., U.K., Canada, Mexico, Australia, Austria, France, Germany, Israel, Italy, the Netherlands and Spain.
- PayPal can be added as a payment option in Apple's account settings, and it will also work for purchases through Apple TV or Apple Watch. PayPal will also integrate with Siri and bring its One Touch mobile feature to authenticate transactions with a fingerprint and fewer clicks or text submissions.
- Once selected, PayPal becomes the default payment method for all future transactions, including one-time purchases of digital media and monthly fees such as Apple Music subscriptions and iCloud storage.
Apple's decision to start accepting PayPal as a payment method looks like a win-win for both companies. PayPal gets access to Apple devices, including a healthy slice of the estimated 728 million iPhones that are active today. Apple doesn't reveal sales from iTunes and the App Store, grouping them into its "services" category, which grew 18% in Q2 2017 to $7 billion from last year.
It's likely that tens of millions of people will make millions of purchases using their PayPal account on an Apple device. Investors are optimistic about PayPal's outlook with the company's stock rising 3.3% to a record close of $56.55 a share after the Apple news. This platform will make it more efficient for consumers who often shop online because they won't need to repeatedly input their credit card information each time they make a transaction.
Apple, whose Apple Pay electronic wallet can be viewed as a competitor to PayPal, gets to expand its user base among 200 million PayPal users who may feel more comfortable and secure making purchases with the established service over other electronic payment systems. More than 40% of U.S. adults online have used PayPal in the last three months to pay for a product or service, according to data from Forrester cited by the Los Angeles Times.
PayPal, which was spun out from parent company eBay two years ago, has sought to handle a wider variety of transaction types and boost its volume. By working with card networks like Visa to gain access to mobile in-store payment systems, PayPal's transaction volume grew 23% during the first quarter from a year earlier, The Wall Street Journal reported. During Q1 2017, 32% of PayPal's traffic came through a mobile device, while mobile payment volume increased 51% from a year earlier to about $32 billion. Venmo, the company's social payments platform, more than doubled its total payment volume from the prior year to $6.8 billion.