It’s inevitable: competition and past legal strife creates some awkward scenarios.
Per The Unofficial Apple Weblog and BankInnovation, PayPal was conspicuously absent from Apple’s list of secured partnerships when Apple Pay was announced in September. Now comes word that PayPal was initially part of Apple’s vision of Apple Pay, but that negotiations fell apart due to Pay Pal’s relationship with Samsung.
Apple and PayPal started talking early on in Apple’s development of Apple Pay, as Apple was setting up partnerships with the card issuing banks and card networks. Since PayPal’s a payments industry leader, it would have been shortsighted for Apple to not reach out to PayPal.
But while these talks were going on, PayPal went ahead and partnered with Samsung on the Galaxy S5 fingerprint scanner, a move that was reportedly forced onto PayPal by eBay CEO John Donahoe. PayPal’s now-former president David Marcus was purportedly categorically against the Samsung deal, knowing that it would jeopardize PayPal’s relationship with Apple. Donahoe won the day, however.
The Galaxy S5 was originally unveiled in February of 2014, right around the same time Apple reportedly started making inroads on securing Apple Pay partners. Karr adds that Apple was furious to learn of the PayPal/Samsung partnership and effectively kicked PayPal to the curb.
Reports of an Apple/PayPal fallout also helps explain PayPal’s somewhat bizarre and baseless jab at Apple Pay security a few weeks ago.
Apple Pay isn’t yet live, but is expected to go operational sometime in mid-to-late October.
Stay tuned for additional details as they become available.