NEW YORK (MainStreet) — It's quite likely that in a few years, pulling out a credit card – embedded chip or not – will seem like a quaint, old-fashioned way to make a payment. Mobile payment tools, while currently the purview of mostly early adopters, are set to transform the payment process -- offering convenience and advanced security. It's also likely that a late arrival to the payment party will soon be the toast of the technology.
Apply Pay, a payment option available for less than three months, is already poised to overtake the transaction volume of Google Wallet – a fledgling effort launched in 2011. ITG Investment Research estimates that with its current adoption pace, Apple Pay could top Google's market share by the end of next month.
But more importantly, Apple Pay could "pose a major threat" to the mobile payment kingpin, PayPal, according to ITG. Despite the fact that Apple Pay is still vertically bound to serve just its own customers and is supported by a "relatively limited list of merchants," the new service has advantages that PayPal may not be able to overcome.
Analyst Steve Weinstein believes that PayPal suffers from "a challenging relationship with payment counterparties" and can't offer the biometric security capabilities that Apple Pay can. Apple Pay also has the power of the brand's affinity and an ease of use that will be difficult for competitors to overcome.