Soon a Spinout, PayPal Faces Threats From Stripe, Big Mobile Players

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makes “a lot of sense.” Circle, which offers digital-wallet accounts for consumers who want to use the digital currency, integrates with PayPal and other processors that let merchants accept Bitcoin.

Allaire says PayPal had been constrained in efforts to sign up new customers who were competitors of eBay.

“For a company that wants to sign on e-commerce sites, being owned by a competitor is a problem. So if they want to go sign on Walmart or Amazon, that’s a problem,” Allaire says. “I think [the spinoff plan] cleans things up. It’ll allow them to focus and execute.”

Even so, PayPal faces a fast-shifting, increasingly crowded field where credit card companies, big vendors like Amazon, and mobile-phone and software companies like Apple and Google are free to form their own combinations and alliances. These include Amazon Payments, which allows consumers to use the credit card information they’ve already submitted to Amazon to make mobile phone payments to participating merchants. And by October, shoppers will be able to use their iPhone 6 to make mobile payments at the mall through Apple Pay.

These new systems from big players could eventually squeeze out digital payment companies such as PayPal or Stripe if the latter bring no added value as intermediaries between credit card companies, cardholders, and merchants.

Mok Oh, former PayPal chief scientist, says the biggest threats to PayPal might be pairings of credit card companies, which operate the primary financial infrastructure needed for payments, with Apple and other marketers of mobile devices, which are directly involved in making purchases.

“Credit cards and banks have the infrastructure, Apples/Googles have the distribution,” Oh said in an e-mail exchange with Xconomy. Big companies like Apple can create a digi wallet and almost instantly have millions of users, Oh said. “Mobile is key.”

Curt Woodward contributed to this report.

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