Apple Pay strikes panic at PayPal by Philip Elmer-DeWitt @FortuneMagazine September 16, 2014, 1:12 PM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons The critics on Twitter are having a field day with PayPal’s full-page “We the people…” swipe at Apple in Sunday’s New York Times (attached). Equating Apple Pay with the easily phished passwords of topless Hollywood celebrities might be viewed, as Pando’s Michael Carney put it, as “an opportunistic and masterful example of reframing the narrative.” But that’s not the way the twittersphere saw it. Owen Williams: New Paypal ad that calls out Apple is pretty rich from a company that has essentially no security and high fees Hal Thomas: I’ve been a fan of @PayPal, but the shot they took at Apple is disappointing, sophomoric. Ben Thompson: Fortunately for Paypal, in their upcoming fight for relevance, they’ll have lots of satisfied customers def… LOL, I just can’t. Keith Rabois: PayPal ad campaign: We will terrify those users into staying with us for another decade. Keith Rabois: Dumbest ad campaign ever? . Those last two tweets, in case you don’t recognize Keith Rabois’ name, come from a former PayPal executive vice president. It’s taken a few days for the implications of Apple Pay to sink in — not just for PayPal, but for rest of the merchant payment ecosystem: The credit card companies, the issuing banks, the kiosk manufacturers, the store owners, the customers. The effect on PayPal may be the easiest to see. It was conspicuously absent from the list of partners Apple announced last week, casting doubt on what was apparently its long-term value proposition: That it would someday cash in on its position as the Internet’s first successful e-payment service. “While PayPal digital wallet/point-of-sale accounts for almost no revenue today,” wrote Piper Jaffray’s Gene Munster the next day, “the hope of this segment becoming a larger portion of its business has had a positive effect on eBay’s multiple in the past.” That’s less likely with Apple in the e-payment business, Munster concluded, lowering his price target for Ebay (which owns PayPal) to $55 from $63. (On Monday Munster also dashed water on last week’s rumor that Google GOOG might take this opportunity to buy PayPal.) What Apple Pay means for the rest of the players — merchants, banks, credit card companies, etc. — is harder to sort out. Asymco’s Horace Dediu took a crack at it Sunday in Critical Path #122: Where the Money Is. One takeaway from Dediu’s podcast: His conviction that Apple Pay will turn out to be one of Apple’s stickiest and most profitable services, with margins approaching 100%. See also: Apple Pay: What the analysts are saying Follow Philip Elmer-DeWitt on Twitter at @philiped. Read his Apple AAPL coverage at fortune.com/ped or subscribe via his RSS feed.