To the untrained eye, the impact that Apple’s late, possibly great, move into payments is having is astonishing. Just last week, PayPal and eBay announced that they would become two companies from next year, following a Board level strategic review. One has to wonder whether ‘strategic’ in this context should be spelt ‘panic stricken.’
Speculation is rife about why the split is to happen. Some of it involves the value of the two companies – and the feeling (probably justified) that together they are smothering value. Separated they will be worth more than if they stay together. Another idea is that PayPal has, at last, got itself a competitor that it is truly worried by. Apple has, again, done what it excels at – making a complex thing both easy and elegant. To stay ahead, so this argument goes, PayPal is more agile by itself.
Another theory says that if PayPal is separate, then it could co-operate with Apple and together they could rule the world. This seems unlikely on account of Apple already ruling the world.
The most compelling – particularly if you have Carl Icahn as an investor – is that PayPal is now for sale. And who might buy it? Google, in order to grab back ground lost when Apple Pay launched? Another payments provider? Alibaba – an eBay on steroids – and recently allowed in to the wonderful world of western hypocrisy, when other Chinese technology companies are still blanked? A bank who has lost its way trying to keep up with young people and fashion and things and who has spent fortunes not integrating communications channels, apps and web sites? Facebook is unlikely as a candidate, since it is – apparently – months away from launching its own mobile payments service. This was always on the cards – why else would you hire David Marcus, PayPal man? Just to tinker around with Facebook Messenger? Unlikely.
Probably the answer lies somewhere in between. The best solution for Mr Icahn would be a lovely little bidding war that would realise upwards of $65 billion.
Ah, I love the smell of payments in the morning.