News & Analysis

PayPal engages in sour political tactics in effort to put Apple in its place

- September 17, 2014 3 MIN READ

It’s understandable why online payments stalwart PayPal is pissed. Apple recently omitted PayPal from its list of preferred payments platforms. That’s a massive blow to PayPal’s ego. It’s like being the cool kid in high school and then a new cool kid comes along and doesn’t invite you to his party. Ouch.

To be fair though, that’s the nature of disruption. We all know that Apple is out to dominate the world in much the same fashion as Google. So it was only a matter of time until Apple announced its foray into the online payments space, especially whilst everyone is still hyped up about the iPhone 6.

PayPal isn’t happy about this, because Apple Pay poses a real threat to the company. By integrating NFC (Near-Field Communication) technology – specifically the Touch ID fingerprint sensor and secure enclave found in the iPhone 6 and iPhone 6 Plus – Apple’s payments system will be able to securely store credit card information for later use at supported point-of-sale terminals.

Apple Pay payments are also tokenised, according to Apple Insider, meaning no credit card holder information is transmitted in the process, only crypto codes generated via the new iPhone’s secure enclave. Many card issuers – like American Express and Citigroup – are already eyeing the benefits of having customers nominate their cards as the default card on Apple devices.

As such, PayPal has struck back at Apple using dirty political tactics – pointing out the flaws of the other party that has little to do with the issue at hand, and humiliating them for it. The bitchiness is quite entertaining. On Monday, PayPal published a full-page ad in The New York Times, warning consumers of Apple’s security practices by alluding to the recent leak of photos stolen from celebrity iCloud accounts.

PayPal ad. Source: Pando.com.

PayPal ad. Source: Pando.com.

As per image above, the ad’s tagline reads, “We the people want our money safer than our selfies. PayPal, protecting the people economy.” This is specifically referencing the what Apple framed as a “targeted attack” against iCloud accounts belonging to celebrity iOS device users. Private photos and videos (some nude) of more than 100 mostly female American and British celebrities – including Oscar-winning actress Jennifer Lawrence and other actors including Kirsten Dunst, Kate Upton and Briton Jessica Brown Findlay – were released via the 4chan website. Apple has received a fair amount of public scrutiny following the event, and PayPal is not shying away from taking full advantage of this.

Added to that, PayPal’s senior director of communication Rob Skinner took a shot at Apple’s live streaming blunder, where the unveiling of the iPhone 6 was occasionally overshadowed by the fact that the live streaming wasn’t always live streaming. In fact, the entire live stream experience could be best described as touch and go, with this screen appearing a number of times throughout the broadcast:

Screen Shot 2014-09-10 at 3.05.46 am

Skinner commented, “Nobody can dispute Apple’s strong track record, but payments is a difficult area. It’s much more difficult to do payments than to keep a live stream working!” #pwned

Interestingly, PayPal-acquired company Braintree announced in a blog its support for Apple Pay processing with its v.zero SDK (Software Development Kit), which allows vendors to accept a variety of payment methods – including credit cards, debit card, and crypto-currencies like Bitcoin. But that’s expected of Braintree. The company has made a habit out of staying classy when faced with competition and criticism. In fact, global payments platform Stripe’s recent arrival in Australia was met with applause from the local startup community, and Braintree was clever not to show any signs of ‘oh fuck, we have a competitor!’ Respect.

It will be interesting to see how Apple responds to PayPal’s petty (yet true) remarks. But given they’re a hipster company, they probably don’t give a shit and will continue on in their day-to-day business. No point in escalating when there’s disrupting to be done.