September 16, 2014
Yesterday, PayPal had a full page ad posted in The New York Times with the tagline as: 'We the people want our money safer than our selfies. PayPal, protecting the people economy.'
It can be said that PayPal was clearly targeting the recent data breaches which took place through the iCloud service. The data stolen involved photos of celebrities. PayPal might have used the ad to indirectly criticize Apple’s ability to provide payment services. It’s a known fact that Apple Pay is seen as a direct competitor to long-standing payment systems like PayPal. PayPal might perceive Apple Pay as a threat to its own One Touch mobile payments enabled via consumer facing Venmo app.
PayPal’s criticism of Apple Pay can also be linked to the fact that during Apple Pay’s launch event, the list of partner payment processors was also released. Although, PayPal and Braintree were not there in that list. This might have sparked things up.
But it is too late for such criticism. Apple Pay has successfully combined NFC technology and Touch ID fingerprint sensor with the secure enclave present in current iPhone 6 models. Further, Apple Pay payments are tokenized meaning no cardholder information is transferred in the payment process. The actual data transmitted includes special crypto codes generated via iPhone’s secure enclave.
To Apple Pay’s advantage, the request from EMVCo to upgrade POS systems by October 2015 is being taken seriously by merchants. The upgradation would bring NFC enabled terminals, ready to accept contactless payments. Seems Apple has entered the payments market at the perfect time. Considering the EMVCo model, Apple Pay is making use of EMVCo’s token requestor concept in a way.
Here is the illustration for the ad as mentioned above:
Source: The New York Times