PayPal Targets Apple Pay: Mobile Payment Showdown Looms in Germany

Following its earlier announcements, PayPal is set to take action by launching its own mobile payment solution on the iPhone. Slated for a release in Germany this summer, the service is poised to compete directly with Apple Pay.

Rather than using Apple’s Wallet app, German consumers will have the option to use the PayPal app to make in-store payments by bringing their iPhone close to the payment terminal. However, for the payments to be processed, the store must accept transactions through Mastercard.

The PayPal app will maintain a record of payments, similar to Apple’s Wallet. In a more innovative move, the new service will also offer the option to spread payments over several months. Apple had previously introduced a similar feature in the US called Apple Pay Later, but eventually stepped back, leaving such services to banks. Nonetheless, PayPal claims that its installment payment option will be the first of its kind in Europe. To encourage customers to use its mobile wallet, PayPal will also provide cashback rewards after purchases, with more details on this offer to be revealed soon.

PayPal is set to challenge the dominance of Apple Pay thanks to the mandatory opening of iPhone’s NFC capabilities in Europe. Another payment service, Vipps, has already capitalized on this opportunity in Norway. Launched at the end of 2024, its iPhone payment function has attracted a million users and is set to expand across other Nordic countries this year.

Like Vipps, PayPal will be able to be set as the default payment app, which can be quickly accessed by double-clicking the side button. However, the agreement between Apple and the European Commission does not allow third-party services to integrate as deeply as Apple Pay. Specifically, they are not allowed compatibility with the Apple Watch. PayPal has not yet disclosed its plans beyond Germany.