PayPal Wallet's Functioning Explained:
PayPal, the renowned digital payment platform, has launched a new offensive to expand its presence in digital wallets and checkout markets, posing a significant challenge to Apple Wallet, particularly in the online payment space.
In a strategic move, PayPal has introduced installment payments, allowing customers to pay in installments of three, six, twelve, or twenty-four months, with a maximum limit of 10,000 euros. This option, available both online and in-store as "Pay in 4," can be found under the "Pay Later" section. It is important to note that a credit check is required for the installment payment option, and the estimate is not a guarantee of credit.
Moreover, PayPal also offers a Buy Now, Pay Later (BNPL) feature for purchases between 1 and 2,000 euros, with a linked debit card. An extension incurring a fee is available for the BNPL option. Customers can choose how many installments they prefer for online purchases. However, the BNPL option is not available in-store.
The BNPL option is interest-free for 30 days, after which the amount is automatically deducted. Setting up the PayPal payment method includes enabling the feature in the app using Face ID or a password.
PayPal has also introduced a double-click feature on the smartphone, which provides quick access to the PayPal wallet, potentially challenging Apple Wallet's dominance on the same device. This feature can significantly boost PayPal due to users being more likely to use the wallet they've set as the default for daily payments. The double-click feature simplifies the payment process at supermarket checkouts, making it similar to launching an app.
iPhone users in Germany can now pay contactlessly at stationary retailers using the PayPal app, thanks to Apple opening the NFC interface. For in-store purchases, customers receive a one-time virtual Debit Mastercard.
As of 2025, PayPal holds a 47.43% share in online payments, significantly larger than Apple Pay's 14.22% share. This demonstrates PayPal's strong presence in digital payments, making it a dominant player in the online payment space. However, Apple Pay boasts the largest digital wallet user base with around 65.6 million U.S. users in 2025, expected to grow to over 84 million by 2030.
PayPal's strategic offensive, under CEO Alex Chriss, has shown a turnaround with five consecutive quarters of profitable growth, driven by AI-driven ad revenue, expanding SMB partnerships, and Venmo’s push into physical retail. Mobile wallets like PayPal and Apple Pay together are anticipated to represent more than half of all e-commerce transaction value by 2026.
In conclusion, PayPal's payment offensive has been highly effective in securing a dominant share of online payments and is actively growing its offline and physical retail footprint, while Apple Pay excels in mobile wallet dominance at checkout points, particularly in the U.S. retail environment. The two complement different facets of the digital wallet landscape: PayPal with broad online and SMB reach, and Apple Pay with device-based convenience and in-store ubiquity.
PayPal's strategic expansion includes introducing technology-driven features like the double-click feature on smartphones, which could potentially challenge the dominance of Apple Wallet in digital wallets and payment markets. Furthermore, PayPal's BNPL feature, available for purchases between 1 and 2,000 euros, leverages technology to facilitate online transactions, each posing a challenge in the online payment space.
