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Apple, Facebook and Paypal Face-Off For Mobile Payment Dominance

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Mobile and social have been enjoying a golden period where the use of one has been beneficial for the other. Now that mobile use is firmly established as part of everyday life, the battle for dominance in the mobile payments market has begun in earnest.

Apple Pay is a new contact-less payment system from Apple, that connects users’ credit and debit cards to a secure, encrypted service that allows users to pay at specialized points of service in stores. The service is scheduled to launch this month and will be readily accepted 220,000 locations across the U.S.

In response to this announcement, Paypal took a pot-shot at the Apple for its recent security breaches. Paypal was apparently able to process $20 billion in mobile payments last year, so it’s no surprise that the company would lash out at the threat of competition from Apple Pay.

Facebook could be a sleeper in this race. As people have begun to dig into the source code of the new mandatory messenger app, they’re finding an infrastructure that could be used for mobile payments.

Chris Gayomali of Fast Company writes that “right now at least, the user-to-user mobile payments space is up for grabs. Whereas Venmo and Square Cash are easy to use, Facebook could have a leg up on the competition thanks to its sheer size.” 

He also notes that “last June, Facebook hired Paypal president David Marcus” and that Marcus was assigned to Messenger. If Facebook starts muscling into peer-to-user transactions, Paypal could find itself partially surrounded.

Sheer size may also be Apple’s advantage when it comes to gaining ground in mobile payments. “Apple has positioned itself better than its predecessors by having more control of the hardware (unlike Google) and by giving consumers a reason to want to use mobile payments (unlike Paypal),” Ruth Reader writes for VentureBeat.

Indeed, Apple’s system seems the best positioned to grow rapidly. Pairing the hardware and software, and linking all that information inside Apple’s closed system could be the perfect way to convince consumers that this is a better way to pay. However, Apple Pay isn’t even out yet, so there is still all to play for in the mobile payments market.

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