the Volume of transactions passing through the payment service Apple Pay is growing. Soon payment system from Apple could be the main rival PayPal in the online payment market, and in the future Apple will have to compete with Visa and MasterCard. It is not excluded that Apple will make its payment system to be independent from other companies.
According to research firm Bernstein, the share of Apple Pay accounts for about 5% of the world’s card transactions, in 2025 the “Apple” of the payment system will provide 10% of global transactions and will be the main competitor to PayPal in the online payment market.
After iPhone sales began to decline, Apple began to develop the service business, which includes payment system. Revenue for the last three months of 2019 were $12.7 billion, which is 17% higher than a year earlier. Ambitions of the company in the area of payments based on years of experience of card transactions and an extensive client base, consisting of hundreds of millions of iPhone users.
the Race for digital payments is a huge opportunity and a trillion worldwide income. The annual trade turnover of Visa and MasterCard is more than 14 trillion dollars and continues to grow as more and more transactions happen via the Internet and mobile applications, as well as consumers in many parts of the world less likely to use cash.
Apple Pay makes money by charging a Commission on each transaction. Users can store their credit and debit cards in the electronic wallet and use it for contactless payments — backed by biometric security using technology near field communication actions (NFC) in the phone. According to forecasts from Juniper Research in the US contactless payments market will grow to us $ 1.5 trillion in 2024, compared with 178 billion dollars in this thdo.
Not long ago, Apple reported that about 9 out of 10 contactless payments made through NFC terminals and Apple Pay have on. According to the source Loup Ventures, the year the popularity of the service has tripled. While the US market for the year account for only 5% of new users on the international market – 11%.
of Course, besides Apple, there are plenty of smartphones with payment apps, but Apple Pay has several advantages. App preinstalled on iPhone, and Apple has tight control over the NFC technology used for contactless payments. That’s why Apple Pay is the only mobile wallet iPhone, which can conduct NFC transactions.
Some regulators are considering the control of Apple over the NFC chip as anticompetitive behavior. Apple claims that its policy is aimed at strengthening the security and to make user interaction with the system easier. Earlier it was reported that the European Commission has launched an investigation against Apple Pay.
In the work of the payment system has seen signs of restriction of competition due to the fact that the Wallet app on the iPhone does not support other payment methods, thereby forcing users to pay using Apple Pay. The Commission representatives said that the regulator is closely monitoring the development of mobile payment solutions, the behavior of the operators who work in the financial sector, including mobile payments.
In November last year German lawmakers approved a new law to combat money laundering, corresponding to the latest EU regulations. The reason was the rule that digital platforms agree to open your interface for the payment of services and applications: it concerns, including mobile payment systems Apple Pay, according to the publication Der Spiegel. So now it will be impossible to carry out contactless data transmission between Apple devices and banking applicationsYami: should be used instead of more complex methods of transfer, such as reading a QR code.
the Law reflects the growing willingness of Germany to weaken the control of US companies over technology products and services. Currently, traditional banking app payments are unable to access the NFC chip in iPhone and Apple Watch and have to resort to such methods of data transfer, as QR codes. Providing participants with access to this platform (for a fee) would help to align the positions of the players, according to legislators.
Apple Pay, which allows you to pay using smartphones iPhone, is a fast-growing area of business companies, which threatens to undermine the dominance of traditional banks in retail payment systems.
However, Apple Pay in the near future will not pose a threat to financial giants. Analysts at Bernstein believe that Apple still needs the support of the card payment system that people trust and that are quite common.
“Apple Pay is really a long-term competitive threats to PayPal,” say analysts at Bernstein. At the moment PayPal is the market leader in electronic payments, but Apple and PayPal may eventually start competing for the same territory in the coming years.