PayPal: Threat From Apple Pay Becomes Real

PayPal shares climbed today although analysts are beginning to debate the implications from Apple Pay officially becoming available on the web. Some analysts see Apple Pay’s expansion from devices and apps to the web browser as presenting a serious danger to PayPal, while others say there’s plenty of room in the market for both to thrive.

PayPal endangered by Apple Pay

Piper Jaffray analyst Gene Munster, who has an Underweight rating and $34 per share price target on PayPal, said the company is in serious danger by Apple Pay’s expansion to browsers. He notes that this will make the iPhone maker’s payments platform available on platforms that amount to more than 30% of PayPal’s total purchase volume, including Mac, iPad and iPhone. He believes PayPal shares were unaffected by the announcement because they have been underperforming recently and because Apple management didn’t mention mobile browsers.

Munster sees Apple Pay as being a better mobile payment solution at the point of service, and when it becomes available as an option online, he sees it as a legitimate threat to PayPal’s staying power. He adds that although it hasn’t been confirmed yet, sources said Apple Pay will become available on mobile web browsers very soon as well.

PayPal’s competitors may be able to beat pricing