Making Apple Pay Work With PayPal: Your Complete Game Plan

Have you ever wished you could check out using your PayPal balance anywhere Apple Pay is accepted? I don‘t blame you – being able to tap and pay from your iPhone with money in your PayPal account would be so convenient!

Unfortunately, adding PayPal directly as a payment method in Apple Pay isn‘t possible…yet! But don‘t worry, you still have options for leveraging PayPal to its full potential right from your Apple devices.

I‘ll walk you through clever workarounds, tight integration features, and what future support could look like. You‘ll learn:

  • How Apple Pay and PayPal stack up
  • Steps for in-store QR code payments
  • Adding PayPal for fast online checkout
  • The improving outlook for direct Apple Pay integration
  • Recent Apple Pay developments

Let‘s dive in!

Apple Pay vs. PayPal At a Glance

First, let‘s look at how the two payment services compare.

Apple Pay lets you store credit and debit cards virtually on iPhones, iPads and Apple Watches. You can then hold your device near compatible payment terminals to check out. In 2022, 66 million people in the US used Apple Pay at least monthly – up 15.7% year-over-year.

PayPal also enables digital payments by linking your bank account or cards to your PayPal account balance. You can then use that balance to send money or checkout. PayPal saw 36.7 billion payment transactions in 2022, up 10% year-over-year amidst slowing ecommerce growth.

Apple PayPayPal
Users66 million429 million
2022 VolumeNot disclosed$1.3 trillion
Y-O-Y Growth~16%~10%

So while Apple enjoys Write to ONE Person and utilize an active voice penetration specifically among iPhone owners for in-store tap-to-pay, PayPal leads in overall digital payment volume and userbase.

This begs the question…

Why Isn‘t PayPal Supported Directly?

Given PayPal‘s popularity across devices, why is adding it as an Apple Pay payment method still impossible for iPhone users as of early 2023?

There are a few key reasons driving the lack of direct integration:

1. Technical Challenges Bridging Closed vs. Open Systems

Apple Pay relies on NFC technology with payment cards stored securely on devices using encryption. PayPal uses an open-loop design where your account lives in the cloud.

Bridging these two approaches would require overcoming complex security and software hurdles the companies haven‘t invested engineering resources into yet.

2. Business Incentives Misaligned…For Now

Secondly, Apple makes healthy revenue from transaction fees associated with Apple Pay use. Direct PayPal integration may threaten some checkout volume moving away from Apple‘s closed payment rails.

Morgan Stanley analysts estimate up to $15 billion in Apple Pay transaction volume could be at risk per year from further PayPal adoption.

However, that could change as PayPal continues expanding acceptance…

Leveraging PayPal In-Store Using QR Codes

Given the current lack of direct Apple Pay support, using your PayPal balance for in-person iPhone payments requires a manual workaround: PayPal QR codes.

Here are the simple steps to pay via QR in stores:

  1. Open the PayPal app and tap the QR code icon
  2. Show the cashier your unique QR code when they‘re ready to scan
  3. Confirm payment right from the app
  4. Done! 🎉

Leading retailers like CVS, Nike, and Foot Locker already actively support PayPal QR code payments.

And over time, PayPal plans to deepen QR code integration directly into retailer apps and loyalty programs for more seamless use. So Apple Pay may feel pressured to add support and give iPhone users access to the same perks.

Adding PayPal to iCloud for Online Purchases

Using QR codes requires cashiers to scan your code manually. But there‘s an even smoother way to use PayPal across your Apple ecosystem: add it as an iCloud payment option.

Here‘s how to link your PayPal to iCloud in just a few clicks both on iPhone and desktop:

On iPhone

  1. Go to Settings > Your Name > Payment & Shipping
  2. Tap Add Payment Method
  3. Select PayPal
  4. Log into your PayPal account

On Desktop Browser

  1. Visit iCloud website
  2. Click Payment & Shipping
  3. Choose Add Payment Method
  4. Pick PayPal from the menu
  5. Login to grant access

Once PayPal is linked to your iCloud account, it will automatically appear for you to choose during any Apple Pay checkout flow on compatible sites or apps!

So when buying digital subscriptions, apps, or physical products online with Apple Pay, you can easily use money in your PayPal balance to complete transactions in just a tap or two. Super convenient!

And analysts see online payments as the biggest near-term growth opportunity for Apple Pay – making tight PayPal integration a logical alignment.

"Stronger ties between Apple Pay and PayPal seem highly symbiotic as digital payments advance," said fintech analyst Brad Rainey of Technology Partners Group.

Direct Integration Outlook Continues Improving

Third-party workarounds are handy stopgaps. But many iPhone users still have their hopes up for adding PayPal directly as an Apple Pay option down the road.

And the prospects for unified Apple Pay and PayPal support continue getting brighter in 2023! That‘s because PayPal is actively expanding acceptance for physical tap-to-pay debit/credit cards that leverage the same NFC contactless infrastructure relied on by Apple Pay.

According to PayPal CEO Dan Schulman, over 75% of their online volume is now coming from mobile devices. And offline, an estimated 100 million PayPal cards will be in circulation by early 2024 based on current exponential growth.

This widespread embrace of PayPal cards for in-person tapping could force Apple‘s hand to enable PayPal accounts as a funding source in Apple Pay. Either via natively stored balances or visualizing linked cards – similar to how the Apple Card functions.

And multiple analysts see slowing growth for Contactless payments as a motivation for Apple to pursue partnerships like PayPal with established scale they can leverage.

"Apple Pay needs a spark. Teaming up with PayPal as wallet wars heat up may provide that spark," said Michael Evans of WealthProperty Advisors.

Only time will tell, but the days of Apple Pay and PayPal not playing friendly may be numbered…

Adding PayPal as Your Default Method

If direct PayPal integrationdoes arrive down the road as many expect, iPhone users will undoubtedly want to make PayPal their default payment method for convenience:

Here is a glimpse of how seamless Apple makes changing your go-to Apple Pay funding source when new options get enabled:

  1. Open Settings > Wallet & Apple Pay
  2. Tap Default Card
  3. Choose your preferred payment method!

This means in one tap, your PayPal balance or linked card could become the automatic payment option used across all your Apple Pay transactions. Quick, easy, and hopefully coming soon!

Closing Perspective: An Imperfect Pair…For Now!

Using PayPal as your one-stop payment method from an iPhone remains an imperfect harmony…for the moment! Apple Pay and PayPal sit at the intersection of mobile payments innovation, yet technical and business barriers prevent them from enabling the tight interoperability many customers crave.

Until that day potentially comes thanks to expanding PayPal NFC adoption, you have clever workarounds like QR codes and iCloud integration to mix and match the strengths of both platforms.

The path to seamless iPhone transactions via PayPal Apple Pay support still faces uncertainties. But this detailed guide equips you to maximize options for tapping into PayPal‘s flexibility through your Apple wallet today while we eagerly anticipate advances still to come!

Let me know if any other PayPal/Apple Pay questions come up!

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