PayPal snubbed on Apple Pay project because of relationship with Samsung – report

1 Oct 2014

Consumer tech giant Apple excluded PayPal from its new wireless payment system, Apple Pay, because of the e-commerce company’s decision to partner with Samsung on the Galaxy S5 fingerprint scanner.

That’s according to a report by Bank Innovation claiming PayPal’s decision – made as talks with Apple were ongoing – upset Apple enough for the plug to be pulled on the whole deal. This was despite PayPal being Apple’s preferred payment process.

“Apple kicked them out of the door,” said one source.

The Samsung agreement had reportedly been orchestrated by eBay Inc (owner of PayPal) CEO John Donahoe, despite the insistence from PayPal’s then-president David Marcus that it would jeopardise the company’s relationship with Apple. Marcus has since left the company to join Facebook.

eBay and PayPal loosen ties

The reports come on the back of yesterday’s news that, after 12 years together, eBay Inc will no longer run PayPal as a part of its company but will instead adopt a policy where PayPal will be spun off to form its own operation with new separate board control. The split is expected to occur in the second half of next year.

Donahoe has dismissed the idea that move has been made due to a conflict of interest between eBay and PayPal, saying the new division will provide new market opportunities for both firms.

“eBay and PayPal will be sharper and stronger, and more focused and competitive as leading, standalone companies in their respective markets.

“As independent companies, eBay and PayPal will enjoy added flexibility to pursue new market and partnership opportunities.”

Apple revealed Apple Pay last month. The system uses a dedicated near field communication (NFC) chip called the Secure Element and supports credit and debit cards from major payment networks, including Visa, American Express and MasterCard.

PayPal image via Shutterstock

Dean Van Nguyen was a contributor to Silicon Republic