With PayPal’s amazing “Tap to Pay” feature being rolled out, iPhone users who make use of the PayPal app will need to note how they can use this feature differently. The new feature is out for users in one particular country and is said to be a change in how contactless payments get handled on Apple’s iPhone device
The rollout in one particular country for now is directly linked to Europe’s Digital Markets Act (DMA) which pushed Apple to unlock the iPhone’s Near Field Communication (NFC) chip to all third-party developers. Forcing Apple to unlock the NFC chip hurt Apple Pay’s long-standing monopoly in terms of tap-based mobile payments.
The good news is that iPhone users in this country will be awarded with more flexibility in terms of cellphone payment options. There are several more benefits to the “Tap to Pay” feature.
Understanding PayPal’s “Tap to Pay” option
Similarly to Apple Pay, that’s how PayPal’s Tap to Pay system works, however, the system is within the PayPal app itself. All iPhone users will have to do is tap their iPhones against their Mastercard-enabled payment terminal and the transaction will result. With Tap to Pay, there is no need for Apple Wallet or even Apple Pay.
The reason why the unlocked NFC chip plays a role is because the newest version of the PayPal app can be easily accessed on iPhones. Users are responsible for downloading the latest version of PayPal which is certainly supported by iPhones.
A range of other services will also be rolled out by PayPal in this country such as:
- Cashback rewards: Users will be able to earn money back when making selected purchases via contactless PayPal payments.
More so because PayPal allows users to get money back every time they pay for a purchase.
A shift in power
PayPal is proving to Apple that it is now in control in terms of the mobile payment ecosystem. While Apple once monopolized control over Apple Pay due to the iPhone’s NFC technology, regulation have forced Apple to release its tight grip on Apple Pay. The DMA has made it possible for third party apps like PayPal to change the face of payment through tapping.
While Apple rather reluctantly gave into regulation and opened iPhone’s NFC chips to rivals, Apple has not done the same for the Apple Watch. Since Apple Watch is restricted to only Apple Pay, it is highly unlikely that Apple users will be able to pay using PayPal’s Tap to Pay system with Apple watches.
Who gets Tap to Pay access first?
Germany will be at the core of this rollout as Germany is one of PayPal’s strongest European markets and also because it is where the new regulatory roles on Apple began. PayPal was one of the many companies that submitted informal antitrust complaints in 2022 to the European Commission. Many of the complaints lodged dealt with Apple’s unfair restriction of the iPhone’s NFC chip. Complaints by PayPal and others led to the regulation passed that Apple permits access to the NFC chip.
Third-party apps are now able to access the same NFC possibilities as Apple Pay. Despite Apple complying in January 2024, the implementation took more time. Prior to PayPal’s Tap to Pay launch, Vipps MobilePay launched numerous contactless payments on iPhone back in December 2024. PayPal seems to be doing the same, but with the focus being on Germany PayPal users.
How PayPal feels about this launch?
PayPal’s statement on tap-to-pay function by Managing Director for PayPal Germany, Austria & Switzerland is that this is the “biggest ever investment in product development.
PayPal has already attracted much attention when secretly boosting balances of PayPal users, so this project by PayPal may be use as a model for global expansion across the European Union and it all depends on how Apple responds to regulatory pressure elsewhere. iPhone users in Germany can get a taste of PayPal’s Tap to Pay offering without needing to take a bite of Apple Pay.
