Six years later, Horace Dediu says it may take closer to 10.
From Dediu’s “Apple Pay’s Pay Day” posted on Asymco Friday morning:
IN a recent release, Apple reported that “more than 90% of stores in the US, 85% of stores in the UK, and 99% of stores in Australia accept Apple Pay.” This is encouraging but a very small view for the global Apple Pay picture. How can we assess where Apple Pay is and how do we even measure success? My expectation six years ago was that Apple Pay would be a “$1 billion business” by 2020. Now that 2020 has ended, how was my six year prediction?…
My expectation six years ago … was based on a take rate of 15 basis points ($15/$10,000 in transactional value). Juniper Research, which regularly examines payment transaction markets, now expects that Apple will see global Apple Pay transactions of $686 billion by 2024.
At that 15 basis point rate it amounts to $1.03 billion. Thus this particular research suggests that I was off by 4 years, making the $1 billion pay day a 10 year target rather than six.
But maybe that is no fault of Apple’s. The transaction volume is also equivalent to 52% of the proximity mobile payment market. Half the addressable payment market is a pretty good market share for a company holding 25% of the smartphone user base.
My take: I like an analyst who will admit he or she was wrong.
It’s one more area, like Apple Watch or AirPods, where Apple arrived late, did it right, redefined the category, and left the rest of the category as fragmented, low ROI dump.
I have patronized more Apple Pay merchants and thanked them for offering it. Home Depot, Lowe’s and Walmart / Sam’s Club remain notable holdouts from the old CurrentC / Merchant Exchange (MCX) debacle of the early 2010’s.
The other detractor was the resistance by some major store chains to ApplePay, because they were trying to push their alternative.
I bet this summer ApplePay usage takes a significant jump, once mask mandates are gone.
And not everyone wants to wear a watch. I haven’t worn one in ~40 years.
I know Goldman Sachs may not be a popular name in these parts (specific to today, of course), but that 2% cash back nearly instantaneously by the combination of Apple Pay and the Apple Card is almost irresistible! Yes. I do have other cards linked, but what’s the point? I actually use my iPhone for Apple Pay more often than my Apple Watch. Purchasing online is mostly when I’m prompted to use my watch.
Guess I’m just not with the program 🙂 🙂
I would only ask that he use it for 60 days or till next AAPL dividend or earnings call. If at that time it doesn’t wow David into keeping it (and any dividend or rise from earnings essentially pays for it), I will personally purchase it from him. My Apple Watch 4 is getting fairly scratched up from my clumsiness so win-win either way! What say we?
I’m game if others are.
(sets somewhat of an awkward precedent though)
You don’t know what your missing.
When the WATCH first debuted, I was tickled by the reaction of some (obviously younger) first-time watch users who were delighted about how it was so nice to not have to dig into their pocket to look at the time on their iPhone.
As to the Apple Pay functionality — to me it’s the second best reason to even have an WATCH. The first being to tell time.
All the rest is resourceful value-add.
But if someone wants to loan me one for 90 days, I’ll accept the challenge 🙂
Why do I not always use the Apple GS MC? It is extremely difficult to sever ties with a credit card company with whom you have been a customer for years; in my case for decades. One’s credit score is predicated on the length of credit relationship one has with a card company. So, to break my relationship with my credit card company with whom I have been associated with for over forty years would have an adverse impact on my credit score. (My credit score ranges between 834 and 850.) Conversely, when I added Apple’s GS MC, that addition pulled my credit score down some points and will keep my credit score down those number of points for the two year period.
Continue….
The Apple GS MC gives a 2% immediate payback. Nice, but that is not nice “enough.” My other card provides greater benefits, although it costs me hundreds of dollars annually. It also provides many amenities. I once was robbed in a small foreign country on the other side of the globe. No one in the town’s only bank spoke English. I used their phone to call toll free to my card company. The representative in five minutes had another card representative on the line who spoke the local language. That representative conversed with bank employees and all my troubles were addressed. When I said a goodbye “thank you” to the card representative on the other side of the globe, it is difficult to describe the relief I felt. I just wanted to give her a hug. This was decades ago before the language conversions apps available today. So, how does one walk away from such a relationship? It is very difficult.