Apple & Mastercard's Move Have Raised The Competition For PayPal

This week, Apple Inc. AAPL kicked off the iOS 18 update, which included a new “Tap to Cash” service.

The analyst expects “Tap to Cash” feature to pose more competition for Venmo than Cash App, considering end-user demographics.

Moreover, Apple announced plans to integrate Affirm Holdings, Inc.‘s AFRM payment products into Apple Pay for U.S. users later this year.

Apart from this, Mastercard Incorporated MA disclosed that starting in 2030, all of its European card credentials will transition to tokenization, and passkeys will be introduced to replace passwords.

The analyst says that although this initiative is long-term, it underscores the ongoing competition for PayPal’s core checkout button and its new Fastlane service aimed at guest checkout.

Overall, the analyst says that PayPal’s new leadership is making sensible strategic moves, with the second quarter tracking ahead of the transaction profit, operating expenses, and EPS plan.

However, PYPL operates in a highly dynamic and complex competitive environment, which may limit the extent of top-line acceleration necessary for significant multiple expansion, writes the analyst.