Shares of online auction giant eBay dropped almost 3 percent on the day Apple unveiled its new Apple Pay mobile payment system, USA Today reported.
Apple Pay, which will let iPhone users pay for purchases in brick-and-mortar and online stores using their iTunes accounts starting in October, will be a direct competitor to eBay’s PayPal. PayPal announced a similar touch payment system for mobile commerce called One Touch PayPal in August.
PayPal has also let customers pay in-store using PayPal since 2012, but the service has not seen much use despite high-profile rollouts at Home Depot and other chains. Unlike Apple Pay, PayPal’s system does not use a mobile phone to make contactless payments.
Apple’s mobile payments system uses a near field communication (NFC) chip in its newest iPhones to enable in-store payments. NFC-equipped phones are also used in mobile payment systems from Google and SoftCard (formerly known as Isis). The earlier NFC-based systems have yet to show substantial use, and Google’s version cost the search giant money for every transaction.
Apple’s new version, which also uses fingerprint-based authentication, faces similar uptake challenges. Apple says 220,000 U.S. stores are equipped to accept payments with Apple Pay. However, there are roughly 9 million merchants in the U.S. that accept cash and credit cards, according to Forbes.