PayPal is also designing a new consumer app for its mobile customers. And it said it would be "prepared" to seize an opportunity under the new EU regulation, the Digital Markets Act, which comes into effect next month for tech "gatekeepers," as well as Apple. For example, for PayPal, one of the biggest changes in the DMA is that third-party apps will be able to tap into the same NFC technology that today powers Apple Pay inside their own mobile wallet applications. The new rules would also allow iPhone users to change to another mobile wallet as their default.

On its Q4 earnings call, PayPal wasn't offering much in the way of insight into its plans regarding Apple's compliance with the DMA, nor exactly how that may affect PayPal. That's partly because Apple is a company PayPal collaborates closely with today: it provides checkout and payment services on Apple devices, Macs to iPhones, as well as integrations with Apple Wallet, including "Tap to Pay" contactless payments which rely on Apple Wallet.

Said PayPal CEO Alex Chriss, a former Intuit exec who joined PayPal last September. "We are tracking this closely," he replied to an investor question about how PayPal was being impacted by the new access to the NFC technology that the DMA allows for. "Apple is a great partner of ours," he added.

But Chriss also said PayPal users had been looking for some way to use PayPal off the Internet and that the company is working on making this happen.

". Our customers who love PayPal on the online e-commerce side are demanding the ability to have an omnichannel and offline solution as well. So, we will work closely on that. And when it is available, we will be ready to be able to deliver for our customers, both online and offline," he replied.

While not a particularly clear answer, it is one which would, at the least, certainly suggest the payments giant is working on something in the NFC mobile wallet space, particularly given the "offline solution" comment.

Offline payments-speak meaning transactions occurring in actual, physical retail stores-is an area PayPal has been trying to expand into for years without much success. From retail partnerships with PayPal in the United States to agreements with point-of-sale software and terminal makers, features to pay local shops via its app, acquisitions of mobile wallet technology, QR codes for retailer payments, partnerships with credit cards on offline payments, tools for merchants selling offline and many more, PayPal's attempts in the past decade do not do much to prove the point.

But whereas the SARS-CoV-2 pandemic accelerated contactless payments significantly up the adoption scale, Apple Pay was at least the U.S. market leader in mobile payments.

About the EU, the penetration of a mobile wallet in Europe is quite high. A good percentage, a 2023 study noted that the majority (72%) was actively using the technology. According to another analysis, the size of the European mobile payment market is expected to be a smoky $108.35 billion by 2024, followed by $373.29 billion by 2029. However, Apple and Google have done very little here. 90% of Europeans have used PayPal services, the study said.

Simply put, PayPal has a great opportunity to cash in on what now is an open door by Apple in the days ahead, if it so chooses.

Apple's DMA-driven changes will introduce new APIs that allow banks and mobile wallet apps to make use of NFC technology across the European Union. Additionally, it is introducing new controls that will likely enable consumers to select third-party contactless payment applications as a replacement for the default. Or in other words, PayPal can potentially replace Apple Pay, if the company desires.

Chriss wouldn't say when PayPal would actually deploy the "offline" functionality that the DMA will enable, saying only that the company would be "ready" to do so sometime after the new functionality becomes available.

Relatedly, PayPal also hinted at a new consumer app in development at the company.

"This year, we're launching and evolving a new PayPal app to create habituation," noted Chriss.

Later on, he added that PayPal's mobile experience for customers was underwhelming. And it is something with the new innovations rolled out, he said he expects to continue seeing improvement there.

The company recently launched a set of AI-based features in the app, including personalized cash-back offers as well as smart receipts that suggest what to buy next from the same brand. This list of features and more was unveiled as part of a "first look" experience in January, Chriss said, which it accomplished in 60 days, rather than the "months or years" they could have taken.

Investors did not dig in to ask more questions on DMA or mobile wallet, but the company already announced when some of the new features will launch, such as CashPass-personalized cashback is due out in March with Smart Receipts said to be coming soon.

PayPal in Q4 beat on earnings with EPS of $1.48, above the $1.36 that analysts were expecting, and revenue of $8.03 billion, ahead of the $7.87 billion that analysts had expected. The stock dropped after the earnings announcement, however, because of weaker-than-expected first-quarter guidance.