News that eBay would be spinning PayPal off into a separate business broke this week, and now information regarding why PayPal may have been excluded from Apple Pay has emerged via Bank Innovation's Ian Kar.
PayPal is not one of Apple Pay's launch partners, despite talks between the two companies being reported before the payment service's launch, and this is reportedly due to a previous deal made between PayPal and Samsung.
According to the blog post, Apple was on the path to making PayPal a "preferred payment process" for Apple Pay, yet it has emerged that PayPal isn't included in the list of partners. Said list does include many big retailers, banks and credit card companies, such as Visa, MasterCard and American Express.
Negotiations stalled when PayPal partnered with Samsung on the Samsung Galaxy S5 fingerprint scanner instead, however, with Bank Innovation's source describing the situation as Apple kicking' PayPal "out of the door."
eBay CEO John Donahoe was reportedly behind the decision despite resistance from former head of PayPal David Marcus, and the company has now been shut out of Apple Pay as a result. Marcus subsequently left the company for Facebook in June of this year.
The blog post also claims other card company partners of Apple Pay had requested PayPal not be included, which may have given Apple additional reason to end negotiations.
It was announced on Wednesday that eBay and PayPal would be continuing as separate companies from 2015, with John Donahoe saying: "The industry landscape is changing, and each business faces different competitive opportunities and challenges... keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively."
Regarding the story, eMarketer added: "Breaking off from eBay will provide PayPal with more autonomy to compete in the payments space, particularly with respect to Apple Pay and other emerging mobile wallet providers."
