PayPal is developing a new app for its mobile customers and is preparing to capitalize on the new Digital Markets Act (DMA) regulation in the EU. This regulation will allow third-party apps to access NFC technology, currently utilized by Apple Pay, in their own mobile wallet applications. It will also let iPhone users switch to another mobile wallet under the new guidelines.
While PayPal didn’t share specific plans regarding Apple’s compliance with DMA and its impact on PayPal on its Q4 earnings call, CEO Alex Chriss stated that PayPal is closely monitoring the situation. He also hinted at PayPal’s efforts to provide offline solutions for customers.
The company sees a significant opportunity in leveraging Apple’s loosened rules, in light of the potential of the EU’s high mobile wallet penetration. The DMA will allow app developers to use NFC technology in their banking and mobile wallet apps and give consumers the option to select a third-party contactless payment app as their new default.
At the same time, PayPal is working on evolving a new consumer app to enhance the mobile experience for its consumers, indicative of its commitment to delivering innovative solutions to its user base.
The company also recently introduced AI-powered features, including personalized cashback offers and smart receipts, as part of a “first look” experience in January. Investors are anticipating the rollout of these new features, including CashPass and Smart Receipts, following PayPal’s strong Q4 performance.
While PayPal exceeded EPS and revenue expectations in Q4, the stock dropped after the earnings announcement due to weaker-than-expected first-quarter guidance.
