eBay Spins Off PayPal: Does Showdown with Apple Pay Await

Online auction giant eBay announced Tuesday that it will spin off PayPal, its online payments system, beginning in 2015. Each of the businesses will operate separately while maintaining the ties that benefit both. But what will that mean for the online payments business -- and for the consumers that have more options than ever in that area?

PayPal processes billions of dollars for about 15,000 banks and other financial groups, in 26 currencies, representing about one-sixth of all online dollars spent. The company has made its way into such difficult markets as China, and its independence will let PayPal work its way into new arenas, especially with mobile payments.

That dominance will be an important asset when it comes to dealing with competitors. Other major players in the online payments arena include Amazon, Google Wallet and PayPal subsidiary Venmo. But most of the attention among PayPal competitors will be given to Apple Pay, which is set to launch this month.

Easy and Easier

The battle between the two could come down to how theyEUre used. In a scenario involving dining out, PayPal requires users to open the app, find the restaurant and check in. They are then given the option to order ahead and choose which accounts they would like to use to pay their tabs.

With Apple Pay, users simply have to position their iPhones near a payment point at a store, and hold their fingers on their Touch IDs. A vibration and a beep will tell them that their transactions were successful.

Consumers will also want to learn more about the security features in the two respective services. With Apple Pay, neither Apple nor the merchants who use it see or store any of their customers' private information. Instead, users take photos of their credit cards and add it to Passbook no...

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