iOS 7 teaser (iPhone 5s ad 002)

It’s no secret that PayPal and Apple partner on iTunes billing, making the payment giant one of the few billing methods available in iTunes.

Matter of fact, PayPal has existed in Apple’s payment system for years now. It would now seem that PayPal wants to run the iTunes billing backend with other retailers as the company is “willing to white label parts of its payment service,” according to a new report Thursday.

PayPal has a strong, established online presence and they’ve been partnering with a growing number of in-store payment companies so the firm could theoretically help build a rumored Apple-branded mobile payment solution…

Jason Del Ray filed this report with Re/code:

PayPal is essentially willing to white-label parts of its payment service to be used in an Apple mobile payments system — anything from fraud detection to back-end infrastructure, even possibly down to the processing of payments.

“They’re telling them, ‘We’ll do it in the background,” one of these people said. “Basically, it’s just, ‘We want to be a part of this.’”

The rumored iWallet is though to use Apple’s Touch ID fingerprint scanning with the A7’s Secure Enclave as a secure authentication method, Passbook for digital coupons and discounts and the iBeacon protocol for initiating point of sale transactions.

The solution would tap the more than 575 million iTunes accounts with credit cards enabled for one-click shopping.

The Wall Street Journal recently said that Apple’s online services boss Eddy Cue met with industry execs to “discuss Apple’s interest in handling payments for physical goods and services on its devices”.

And, Apple’s boss Tim Cook suggested in an earnings call with analysts earlier this week that the demographics of Apple users and the amount of commerce that goes through iOS devices together represent “a big opportunity” for the platform.

We’re seeing that people love being able to buy content—whether it’s music or movies or books, from their iPhone using Touch ID. It’s incredibly simple and easy, and elegant, and it’s clear that there’s a lot of opportunity there.

The mobile payments area in general is one that we’ve been intrigued with. That was one of the thoughts behind Touch ID, but we’re not limiting ourselves just to that.

Apple currently uses the iTunes billing backend to enable customers to pay for digital purchases on iTunes and physical goods sold at its online and retail stores.

Keep in mind Apple never partnered with brick-and-mortar retailers for iTunes billing.

Therefore, any comprehensive payment solution from the iPhone maker would need to be strongly supported at third-party points of sale if it wanted to be useful.

Would you pay for groceries with your finger?

Who’s looking forward to an iWallet?