Two new reports suggest that Apple’s investment in its proprietary payment system is paying off, big time.
Apple Pay accounts for about 5% of global card transactions and is on pace to handle 1-in-10 such payments by 2025, according to recent trend data compiled by Bernstein, a research firm. “There are indeed plenty of reasons to worry that Apple may attempt to disrupt the payments ecosystem,” Bernstein analysts, led by Harshita Rawat, wrote in a research note…
The digital payments race is an immense opportunity, representing about $1 trillion in revenue around world. Visa and MasterCard process more than $14 trillion of payments each year and are still growing as more transactions go online, flow through apps, and as consumers in many parts of the world use cash less often…
There’s no shortage of slick, feature-rich payment apps out there, but Apple Pay has several advantages. The app is pre-installed on iPhones, and Apple has tight control over the device’s NFC technology that’s used for contactless payments. That’s why Apple Pay is the only iPhone mobile wallet that can make NFC transactions. (Alipay and WeChat Pay, the enormously popular Chinese payment apps, use QR-codes. The optical codes are read through a phone’s camera and aren’t controlled by Apple.)
From Jupiter Research: Apple Pay Still Leading OEM Pay Battle
The research found that Apple Pay will account for a 52% share of OEM Pay transaction values, up from 43% in 2020. The expansion of Apple Pay’s user base in key regions, including Far East & China and Europe, will drive growth, as well as the extension of Apple’s reach outside OEM Pay through its Apple Card initiative.
Research author Susannah Hampton explained: “Apple is now leading the space, owing to its unified ecosystem. Competitors, including Google and Samsung, must continue to expand the reach of their services in order to make strides in the market”.
My take: Has it really been seven years since Apple put a flaky fingerprint reader on the iPhone 5S? I remember wondering at the time what the hell Apple was up to. Now I know.