Apple nudges PayPal deeper into Bitcoin
by Jennifer Booton
EBay is hedging by taking a bet on Bitcoin
SAN FRANCISCO (MarketWatch) -- EBay is taking a bet that digital currencies like bitcoin lead a new wave of payments in the future. And it’s doing this just ahead of the launch of Apple’s new, potentially eBay-rivaling, payments service.
EBay CEO John Donahoe has long expressed interest in Bitcoin
The San Jose, Calif.-based company on Tuesday announced agreements with leading bitcoin payment processors BitPay, Coinbase and GoCoin to enable PayPal merchants to accept the currency. eBay EBAY, -0.23% will gradually widen its support of bitcoin, said Scott Ellison, PayPal’s senior director of corporate strategy, at first rolling out the capability only to merchants in North America. The announcement comes at a critical point for PayPal’s merchants business as mobile payments continue to evolve.
Apple Pay, Apple’s AAPL, +0.39% new one-touch payment service, is set to spring to life next month in some 220,000 stores across the country.
While it’s unclear whether bitcoin will play a part in Apple Pay, Apple did lift its ban on bitcoin apps earlier this year, and it will eventually open up Apple Pay to developers, potentially enabling third-party interaction between bitcoin and Apple Pay. “I think PayPal recognizes they are at risk on a number of fronts and is becoming far more aggressive about meeting a wider variety of customer needs as a result than they otherwise would be,” said Rob Enderle, principal analyst at the Enderle Group.
Analysts have been bullish on Apple Pay so far, particularly how debit and credit card transactions conducted through the platform will enhance Apple’s bottom line and transform the mobile-payments market.
EBay’s shares fell as much as 2.5% to an intraday low on Sept. 9, the day Apple Pay was announced at a lavish event in Cupertino. On Tuesday, they closed up 0.51% to $52.74 after spiking as much as 1.5% earlier in the day.
EBay’s foray into bitcoin serves as a long-term hedge against the gradual rise of cryptocurrencies, said Roger Kay, tech analyst and founder of Endpoint Technologies Associates Inc. However, the event in Cupertino no doubt served as a nudge as well.
“Apple’s announcement is just another data point,” Kay said. “As an established payments processor, PayPal can’t afford to be left behind if any of these new schemes take off.”
EBay chief John Donahoe has long expressed interest in bitcoin and hinted that the digital currency could play a part in PayPal’s future. The company earlier this month took its first stab at it when it teamed with bitcoin exchange Coinbase to allow eBay’s Braintree customers, which include Uber and Airbnb, to accept the currency.
“This new entrant in the world of payments has people asking lots of questions – including how and if PayPal will decide to work with bitcoin,” Ellison said. “We hope to do more with bitcoin as its ecosystem continues to evolve.”
PayPal will not process the payments or add the currency to its digital wallet. But Ellison said PayPal will “proceed gradually” with the roll out, supporting bitcoin in some ways and not in others, and seeing “how things develop.”
[Note that, unlike the “free market system”, internet cryptocurriences (aka, "alternative financing") such as Bitcoin are not transparent and allow secret financial transactions worldwide. They have already been found to be involved in drug smuggling, illegal human trafficking, various gang- and terrorist-related transactions, etc. Silicon Valley’s Bitcoin is openly connected to transhumanism/posthumanism and futurism, e.g.: CONNECTION with TRANSHUMANISM: (Bitcoin) Silicon Valley’s Elite Don’t Want to Secede. They Just Want to Stay on Top, at: https://www.wired.com/business/2013/12/balaji-srinivasan-joins-a16z/ and CONNECTION with FUTURISTS (who are transhumanists): -- Kurzweil: Bitcoin attracts major investors, at: https://www.kurzweilai.net/bitcoin-attracts-major-investors The article first appeard here. -- DNI]