Apple Pay's success has rivals scrambling to catch up, could make PayPal an acquisition target
The strong initial success of Apple Pay, combined with the news that eBay will spin off PayPal, has led to expectations that PayPal could be a major acquisition target for mobile companies vying for users' wallets.
Apple Pay's launch has sent competitors such as Google and Samsung scrambling to respond, through acquisitions or otherwise, according to the Financial Times. As a result, bankers believe that PayPal, which eBay announced this week that it will spin off, could be a potential target for purchase.
eBay will separate from PayPal sometime later this year, which could make the payments service with 150 million users an attractive acquisition target.
Earlier this month, it was revealed that Google has apparently been in talks to acquire Apple Pay competitor Softcard. That company is a joint venture backed by U.S. carriers Verizon, AT&T, and T-Mobile, and it offers support for payments through American Express, Chase, Wells Fargo, and other large financial institutions.
Google is looking to get back in the game after its Google Wallet service fell flat with consumers, and has since been trounced by Apple Pay. Facebook is also said to be on the market for potential mobile payment acquisitions, while Samsung was rumored last month to be in talks with startup company LoopPay, in hopes of debuting its own mobile payments service with wide compatibility this year.
Bankers also indicated to the Times that there are a number of smaller companies that are prime to be acquired, namely Dwolla and Paydiant.
In its quarterly earnings conference call this week, Apple touted the success of Apple Pay. Chief Executive Tim Cook went as far as to call 2015 "the year of Apple Pay," saying that he expects even more growth for the new service as 2015 progressive.
Initially, 500 banks and financial institutions pledged support for the service, but that number has swelled up to around 750, with even more requesting to partner up. Cook said Apple Pay now represents 80 percent of contactless transactions at Panera Bread, while upscale grocer Whole Foods saw a 400 percent increase in contactless payments since the service launched.