Yes—PayPal can now compete with Apple Pay on an iPhone in parts of the European Economic Area. The European Commission made Apple’s commitments to open specified iPhone NFC payment access legally binding in July 2024. PayPal used that opening to launch a contactless wallet in Germany in 2025. That does not make PayPal a replacement for the entire Apple Wallet app, and the available evidence does not show an identical rollout across every EU or EEA country.
The short answer
- Can PayPal challenge Apple Pay on iPhone? Yes, where PayPal’s contactless service is commercially available and the customer qualifies.
- Where is the confirmed launch? Germany, where PayPal announced nationwide availability in 2025.
- Why is this possible? Apple’s legally binding European commitments give eligible third-party wallet providers access to specified iPhone NFC and contactless-payment functions independently of Apple Pay.
- Has PayPal replaced Apple Wallet? No. It competes mainly with Apple Pay’s tap-to-pay function, not with Wallet’s passes, tickets, IDs, keys and Apple Watch ecosystem.
Why Apple had to open iPhone contactless payments
Apple Wallet is the iPhone app that stores payment cards, passes, tickets and other credentials. Apple Pay is the payment service that runs through Wallet. NFC (near-field communication) is the short-range radio technology that lets a phone communicate with a contactless terminal.
The European Commission opened an Apple Pay antitrust investigation on June 16, 2020. It issued a Statement of Objections on May 2, 2022, alleging that Apple restricted access to NFC functionality needed for contactless payments. After market-testing proposed remedies from January 19 to February 19, 2024, the Commission accepted Apple’s final commitments on July 11, 2024. The commitments are legally binding for ten years and cover the European Economic Area (EU member states plus Iceland, Liechtenstein and Norway), not just the 27 EU countries. European Commission decision; EUR-Lex case summary
The remedy concerns NFC-based in-store payments and related interfaces. It is not a promise that every Apple Wallet feature must work in every rival app, nor an unrestricted opening of Apple’s entire Secure Element. Eligible providers receive access subject to security, privacy, authentication, eligibility and dispute procedures.
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What users can control
The commitments include controls for choosing a default contactless app, launching it with a double-click or when an iPhone detects a payment field, and authenticating with Face ID, Touch ID or a passcode. Apple’s developer documentation says supported EEA apps need an HCE (Host Card Emulation) entitlement. HCE lets an app emulate a payment card through approved contactless APIs rather than using Apple Pay’s proprietary wallet path. Apple developer documentation
From PayPal’s 2024 hint to a German product
In August 2024, PayPal chief executive Alex Chriss said the European NFC changes created an opportunity for PayPal. PayPal described a broader ambition to connect online and offline commerce, but had not announced a finished iPhone wallet or a Europe-wide launch at that point. TechCrunch report
That speculation became a real, if geographically limited, product. In May 2025, PayPal announced its first contactless mobile wallet for consumers in Germany through the latest PayPal app on iOS and Android. PayPal later said the wallet was available nationwide in Germany. PayPal launch announcement; PayPal Q2 2025 earnings presentation
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What PayPal’s German contactless wallet does
PayPal’s German service is a third-party payment wallet inside the PayPal app. It uses a virtual Mastercard for the contactless transaction. PayPal says the available PayPal balance is used first, with a linked bank account used as applicable, and that the virtual card works at locations accepting Mastercard contactless payments. Its German instructions also say customers can make PayPal their default wallet for contactless payments. PayPal Germany contactless payments
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- Tap to pay in stores through the PayPal app.
- A consolidated view of online and in-store purchases.
- Eligible German customers can use “Ratenzahlung To Go” to spread certain purchases over 3, 6, 12 or 24 months.
- Promotional cashback and other offers may appear in the PayPal app.
“Works wherever Mastercard contactless is accepted” still has conditions. A transaction can fail because a terminal lacks contactless support, a merchant or transaction category is restricted, a funding authorization fails, a PayPal account is limited, a contactless limit or extra authentication applies, or the country and account do not support the feature.
Germany is not the same as an EU-wide replacement
Apple’s technical opening applies across the EEA, but regulatory permission and commercial availability are different things. The verified launch is Germany. The available sources do not establish a completed, identical PayPal rollout across all EU or EEA countries by August 16, 2026.
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A German feature should not be assumed to work for a visitor with a foreign PayPal account, a resident of another EEA country, or someone with an unsupported PayPal card or funding source. Check the PayPal app and the support page for the country where the account is registered. Local licensing, card issuance, bank connections, consumer-credit rules, scheme arrangements and demand all affect expansion.
PayPal versus Apple Pay
| Capability | Apple Pay through Apple Wallet | PayPal contactless wallet |
|---|---|---|
| Primary role | System-integrated contactless payments plus Wallet credentials | Contactless payments inside the PayPal app |
| Payment credential | Eligible bank-issued cards stored in Wallet | PayPal virtual Mastercard, subject to country and account eligibility |
| Funding | Selected card issuer account | PayPal balance first, with linked bank funding as applicable |
| Default contactless app | Apple’s integrated default experience | Can be selected as default where PayPal and iOS support it |
| Authentication | Face ID, Touch ID or device passcode | Uses PayPal’s account and app controls within Apple’s approved contactless framework |
| Apple Watch | Integrated support is a major Apple advantage | Not established as equivalent in the cited PayPal material |
| Passes, tickets, IDs and keys | Supported by Apple Wallet, depending on issuer and country | Not established as equivalent to Apple Wallet’s credential system |
| Online and offline history | Apple Pay transactions and Wallet cards | PayPal combines online and contactless purchase history |
| Installments and offers | Depends on the card issuer and merchant | German launch includes eligible installments and in-app promotions |
| Geographic availability | Broad Apple Pay availability varies by country and issuer | Confirmed contactless launch in Germany; wider EEA rollout not established |
PayPal therefore challenges Apple Pay’s role as the default way to tap, while Apple Wallet remains a much broader container. A user can retain Apple Wallet and choose PayPal as the default contactless app where supported; default selection is not exclusive ownership of every payment or credential function.
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An existing financial relationship
PayPal customers may already have a balance, linked funding source, transaction history and account authentication. A PayPal tap can avoid adding another bank card and can keep online and physical purchases in one account.
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Credit, installments and promotions
Apple Pay is principally a payment container and authentication layer. PayPal can differentiate with credit decisions, installments, cashback, buyer-protection policies and merchant-funded offers. The German installment feature is credit, not automatically free financing: approval, interest, fees and exclusions must be checked for each purchase.
Merchant-facing integration
Merchants may value Mastercard acceptance, PayPal’s online-to-offline reconciliation, promotional tools and financing options. Those benefits matter only if transaction economics, settlement, fraud handling and customer demand make the arrangement worthwhile.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Why Apple Pay remains difficult to displace
- System integration: Apple controls the familiar Wallet interface, authentication flow and much of the hardware-level experience.
- Card breadth: Apple Wallet can hold many eligible bank cards, while PayPal’s contactless product depends on PayPal’s own virtual credential and local funding support.
- Convenience: An iPhone owner may already have cards, transit credentials and passes configured in Wallet.
- Apple Watch: Apple’s watch integration is a significant advantage not shown to be matched by PayPal.
- Trust and security: PayPal must persuade users that its account authentication, virtual-card credentials and fraud controls are fast, private and reliable. Apple’s rules preserve entitlement and security requirements rather than removing them.
- Rollout friction: European payment products require country-specific partnerships, permissions, languages, card support and consumer-credit compliance.
What the opening means for other wallets
PayPal is one entrant, not the only beneficiary. Banks, card networks and fintechs can seek access to the same approved iPhone contactless interfaces. A domestic bank wallet might offer stronger local account features or loyalty programs, while Google Wallet remains a major Android competitor rather than a direct iPhone substitute. The Commission remedy makes Apple Pay contestable; it does not guarantee that a particular rival will gain users.
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What to check before switching
- Confirm that your PayPal account country and PayPal app version support contactless payments.
- Check that you have the required eligible PayPal virtual card and funding source.
- Read the country-specific terms for currency conversion, card use, buyer protection and any installment plan.
- Verify that the merchant terminal accepts contactless Mastercard and that no transit, offline or category restriction applies.
- Choose PayPal as the default contactless app only if its funding, rewards and account features matter more to you than Apple Wallet’s card, pass and Watch integration.
What happens next
The important unresolved questions are commercial rather than purely legal: whether PayPal expands beyond Germany, adds broader local card and bank support, and persuades customers to change their default wallet. It also remains to be seen whether banks launch compelling alternatives and whether PayPal’s financing, offers and unified purchase history generate more use than NFC access alone.
The strongest current conclusion is narrower than the original 2024 headline: Europe has made Apple Pay’s iPhone contactless position contestable, and PayPal has demonstrated a functioning alternative in Germany. A continent-wide replacement for Apple Wallet has not been established.
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