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Rumors of Square Selling, Apple Launching, Payments Business

PayPal dominates in pure-play online payments, but with more transactions taking place via mobile, could a potential service from Apple – maker of smartphones and tablets – take a bite out of its market share? Rumors again surfaced this week that Apple is preparing a mobile payments solution.

Would an “Apple Payments” be restricted to the purchase of digital content, or would the company be interested in a full-featured payments solution that users could use for in-store purchases of physical goods and services?

eBay CEO John Donahoe said earlier this year he doesn’t fear the latter because the world of physical payments is different from digital payments. “Digital payments is an easier business,” Donahoe said.

ArsTechnica said Apple could actually be considering using eBay’s PayPal service to help it build out a payments solution. It would be a tradeoff for PayPal – less margin from Apple-branded transactions, but on the plus side, it would stave off what would sure to be a fearsome competitor.

And speaking of PayPal competitors, rumors also swirled on Monday around Square, which had beaten PayPal into the card-reader space. The Wall Street Journal said Square may be in talks with rivals as it considers selling the business with its “losses widening and cash shrinking.”

A PayPal spokesperson told the Journal it had not been in acquisition talks with Square; a Square spokesman said it had not been in acquisition talks with Google; and in fact, the Square spokesperson said, “While we appreciate that Square may be an attractive target for some companies, we have never seriously considered selling to anyone or been in any talks to do so.”

Plenty of merchants would like to see a viable competitor to PayPal – more choice and greater competition is always welcome. But even if any part of this week’s rumors comes true, it doesn’t look like there is a “PayPal killer” on the horizon.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.