Is Apple working on a PayPal killer?

Aug 5, 2009 by Dan Taylor    10 Comments    Posted under: News, Technology

Just about everywhere you go these days, someone’s trying to make it easier for you to pay. Obviously, the driving force behind this is to ultimately make the sale by facilitating the consumers option to pay. And while the internet has seen it’s fair share, some successful, others not, of ways to pay, there is a constant stream of improvements to the method making their way to market everyday. But let’s face it, when it comes down to paying for something via the internet, without a direct credit card charge, my guesstimate would be that 85% of the average internet surfing/shopping consumer could name only one: PayPal.

We already know for certain that facebook has been playing with microtransactions and multiple payment platforms and options via their “Pay with Facebook” system, but as of now, we’ve got nothing but confirmations that something is being worked on. All that might come to a grinding halt if Wall Street gossips have any validity behind them. Silicon Alley Insider is reporting that said gossiper(s) may have had one too many drinks at a lower Manhattan establishment recently, and mentioned that Apple execs have dropped hints suggesting that the primarily hardware focused company is considering creating a service that would allow iTunes users (store account holders, with a valid credit card on file, or course) to use those accounts to pay for things outside the iTunes realm.

Remember, with the introduction of the iPhone OS 3.0, users are now able to spend freely on virtual and subscription goods within third party iPhone applications. In other words, the vast majority of the technology is already there, it’s just a question of opening this tech up to interface with external third-party platforms.

Now again, traditionally Apple has worked on projects that will solely drive hardware sales. iTunes certainly drove/drives iPod and iPhone sales, so why the interest in what basically boils down to a SaaS? Once you’re at the top of the pile, it’s tough to stay there. There are plenty of upcomers, as you once were, that are hungry and eager for your spot. Perhaps Apple is looking at a payment platform as a natural extension of their already easy to use iTunes Store functionality. One could make the argument that via iTunes, Apple effectively brought the microtransaction payment mechanism to the masses via iTunes, so why limit the functionality just to music? Apple has already branched out into providing video, either for rent or purchase, and again, with the OS 3.0 introduction, provided a way for application developers to monetize through in-game microtransactions.

While this is mere speculation and gossip at this point, a three way battle between eBay (parent company to PayPal), Facebook, and Apple would most certainly up the ante for all parties involved. Competition is a time tested catalyst for innovation, and any way you look at this battle, the ultimate winner is both the consumer and the vendor. Let’s see what Cupertino’s got in store (ouch…no pun intended) for us next.