PayPal (PYPL) has had one heck of a year, that much is evident from the payment giant's third quarter earnings.  

Shares of PayPal have surged 77% this year, blowing away Facebook (FB) , Apple (AAPL) and JPMorgan (JPM) . After TheStreet talked with PayPal CEO Dan Schulman recently, you can see why Wall Street has embraced the stock. PayPal is really reinventing itself.

The company is striking new deals to open up its platform to others such as Facebook and Baidu (BIDU) . Meanwhile, Schulman explains the coming Apple Pay Cash may not instantly be a major threat to PayPal's popular Venmo service -- building a Venmo won't happen overnight for Apple.

"We have seen a lot of services come into the market and Venmo continues to exhibit very strong growth -- I think we will become increasingly differentiated." Schulman added that there is a very "viral" component to using Venmo that competing services probably lack.

"It's about time Apple did this," S&P Global Market Intelligence analyst Kellsy Panno told TheStreet about Apple Pay Cash.

Person to person payments have better growth profiles than in-store mobile payments, she said, and have been important to PayPal and Venmo.

"PayPal and Venmo have been allowed to own that segment," she said. "Apple pay sort of ceded that."

Venmo is popular among consumers aged 25 to 34 and is making inroads among younger users. Venmo does not charge for most of its services, and so far has provided negligible revenues to PayPal. However, PayPal is rolling out a "Pay with Venmo" feature that allows users to make purchases at stores that will generate fees. The company plans to have the service in millions of locations by the end of the year, and Barclays analyst Darrin Peller suggested in a mid-September report that Venmo can also generate revenue by selling advertising on the app.

"There is no shortage of people that would like to advertise in the feeds that we have, but we want to be very careful," Schulman said.

As for Apple Pay Cash, users will be able to make payments through messages, or tell Siri to make a payment, and they can keep money on a virtual card in their Apple Wallet.

Apple has large, loyal customer base. Focusing on iOS users will limit the market for Apple Pay Cash, however. Panno suggested that Apple should borrow from Paypal's playbook, and ensure that the app works across other mobile platforms, just as Venmo does.

"Apple in general hasn't been known to sort of embrace cross-platform cooperation," she said.

For Apple Pay Cash to be truly successful, Panno suggested, it must be device agnostic.

PayPal and Venmo have a large lead on Apple, but should prepare for serious competition.

"Their interest should be piqued," Panno said.

Apple is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio . Want to be alerted before Cramer buys or sells AAPL? Learn more now.

Go Inside PayPal's Big Reinvention: TheStreet's Full interview with CEO Dan Schulman

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