Rumors that Apple Inc. (NASDAQ: AAPL) is planning the release of a mobile payment system for the iPhone in the near future received a powerful shot in the arm today thanks to PayPal’s expression of nearly unconditional interest in the project. Reading between the lines of the offer, PayPal appears to be prepared to operate in the background, providing unbranded payment processing, fraud fighting, and other infrastructure services.
A mobile payment system for the iPhone would be a notable addition to Apple Inc.’s (AAPL) suite of products and services, likely constituting the Cupertino, California firm’s most important business action in the year during which it was released.
Less clear, however, is whether Apple needs PayPal at all in order to successfully implement the planned system. According to a report on re/code that draws on statements from industry executives, the proposed alliance may be no more than a desperate attempt by PayPal to get a piece of the brick-and-mortar sales action rather than being simply brushed aside by the Apple juggernaut.
Apple’s (AAPL) iTunes store already represents a robust credit card processing platform which might be adapted to the retail environment that still makes up a minimum of 85 percent of consumer purchases. Tim Cook also hinted strongly that the current Touch ID system could be expanded into an all-purpose mobile payment platform for the iPhone also. Though none of these ideas are set in stone, at least from the perspective of outside observers, it is clear that Apple Inc. does not lack for options when it comes to the precise method of implementing their plan.
Additional rumors are swirling in some quarters regarding Carl Icahn’s role in the possible alliance between Apple Inc. (AAPL) and PayPal (EBAY). Suggestive facts include the billionaire investor’s recent infusion of approximately $1 billion cash into Apple Inc., his ownership of eBay shares, and his January 22, 2014 urging that PayPal should be spun off from its current parent company.
Though Mr. Icahn has not issued any statement linking his purchase of Apple shares, recent attempts to separate PayPal from eBay, and the possible collaboration between the two companies on an iPhone payment system, the timing of these actions and events has provided fertile material for speculation about Apple’s mobile payments plan and the investor’s role in it.
For more Apple news follow PFhub on Twitter or bookmark this page.
