PayPalannounced today, plans to launch contactless payment services in Germany, allowing GermanyiPhoneneUsers use their PayPal accounts to make click-and-pay purchases in stores. PayPal is able to offer this feature because Europe's Digital Markets Act forced Apple to open up the NFC chips in its devices to third-party apps.
NFC payments can be used within apps without launching the Apple Pay or Wallet apps, allowing third-party payment services and banks to offer their own "tap and pay" solutions on Apple devices.
European users can choose the default app that activates when their iPhone is held near an NFC terminal or double-clicking a button on the side of the device, so paying in stores with PayPal is as seamless as paying with Apple Pay.
PayPal said it will launch its first contactless mobile wallet "in the coming weeks," with Germany as its first test market. With the latest version of the PayPal app on iPhone, PayPal users will be able to use PayPal for in-store purchases at any store that accepts contactless Mastercard payments.
To entice customers to use PayPal instead of Apple Pay, PayPal is offering cash back offers in the PayPal app and will eventually support an installment feature, offering 6-, 12- and 24-month installment options.
Banking and wallet apps in the European Economic Area (which includes the 27 EU countries plus Iceland, Liechtenstein and Norway) can be accessed using NFC.