Apple declares war on PAYPAL: Pay-by-bonk + iTunes = profit, right?

Apple is planning to take on Paypal with its own mobile payment system, it has been claimed.

According to a report in the Wall Street Journal, Eddy Cue, the man in charge of iTunes and the App Store, has been meeting with industry bigwigs to discuss using iDevices to handle payments for goods or service.

It is understood that Jennifer Bailey, a fruity firm veteran who currently runs Apple's online store, will be responsible for building and leading the new payments division.

Apple appears to be edging towards a situation where an iTunes account can be used to buy items in the real world, essentially replacing credit cards.

Currently, some items in real-world Apple stores can be bought using an iTunes account linked to a credit card, but further developments signpost Cupertino's future plans.

It has introduced a finger scanner on the 5S, which could potentially be used in a mobile payment system, as well as iBeacon, which can track a shopper as they walk the aisles.

However Apple decides to proceed, one thing is obvious: mobile payments are big business, particularly for a company like Apple which boasts 575 million registered iTunes users.

In a letter to Apple shareholders, investor Carl Icahn wrote: "We believe a revolutionary payments solution is now a very real opportunity that the company could choose to pursue. " ®