• by Sean Hargrave , Staff Writer, July 21, 2015

As PayPal is prepared to be spun out from eBay, most experts are agreeing that it's big enough to stand on its own two feet and survive renewed competition. My big question, however, is how on earth did it miss the leap to contactless mobile payments?

Or I will put it another way. I've had a PayPal account for many years and online, it's proven to be a really useful way of buying things without reentering card details. Or, at least, it's convenient everywhere apart from Amazon, where one-click purchasing just can't be beaten. So, like many, I've had a PayPal account for many years, and yet the first company to offer me contactless payment through my mobile phone has turned out to be its maker, Apple.

I have the PayPal app installed on my iPhone, so it's already in there, but I've never had an occasion to use it. If you're out and about, we have had contactless credit credit card payments for the past couple of years and if it's more than twenty pounds you're usually in a situation where putting a card in a reader is not too much of a bind. In fact, it's quite reassuring. 

So PayPal's logo and app are right there on my iPhone pretty much unused, and now I'm all set up for contactless, via Apple Pay and my Amex. In fact, it was interesting to see today that the biggest use for Apple Pay in its first three days after launch last week was Transport for London (TfL). It makes perfect sense that people staring at their phone before they get on a bus or tube would present it as a means of payment. The same applies for the sandwich and coffee chain, Pret a Manger, which came in at second place.

I will wager you a chunky Kit Kat (those are high stakes in this household) that many of those people who are out and about in town catching tubes and grabbing a bite on the run are PayPal customers and are likely to have the mobile app. So -- and I'm still scratching my head here -- why hasn't it been swung in to action? Is it because PayPal can't get access somehow to the near field communication (NFC) chip on the latest phones? You just cannot imagine it hasn't tried, can you?

Instead, the latest news from PayPal has centred on its contactless reader for its debit card. If I'm reading this right, people will soon be able to use a PayPal card without having to put in a PIN. In other words, exactly what they can already do with pretty much any other credit or debit card out there.

So as PayPal gears up for contactless card payments, the game -- from what I can see -- has seriously moved on. Apple Pay gets away with the need for cards for small contactless payments, as will Google Wallet before the end of the year. Which are you going to use? A contactless presentation of the phone that's already in your hands or a quick search through pockets and a wallet to find a debit or credit card?

I could well be missing the point here somewhere. But isn't PayPal being spun out just at the the time it faces its stiffest ever competition from rivals who have a real trick up their sleeve that serves a very real, pressing customer need?

PayPal has proven to be irreplaceable to me, and millions of others, in the desktop age. I've never used it on a mobile device, however, and I'm unlikely to now that it's so much more convenient to present an iPhone to a contactless reader at a Pret a Manger or to a bus driver. For me the payment company has embraced mobile but not contactless, and that, to the market, is going to mean one and the same thing.