Apple Pay is poised to become the preeminent mobile payment service. Other solutions like CurrentC and Samsung Pay also receive considerable media attention, but they pale in comparison. Apple Pay has inspired renewed interest in digital solutions and as a result, Google, Facebook and Twitter have made advances with their respective payment portals. Currently, PayPal sees the highest transaction volume, but it has been around for much longer. Apple’s product is slowly catching up. Over the next five years, according to forecasts, Apple Pay is expected to transform the payments industry and capture significant retail market share. With retail partners constantly being added, the sky is the limit.
Big things will happen for Apple Pay and the payments industry
A recent Business Insider report indicated that analysts are very optimistic about mobile payments. In the U.S., mobile payment volumes are expected to exceed $800 billion by 2019. Apple Pay is expected to be the main driver of that activity, although the product’s full potential will likely be realized over the course of the next five years. Apple Pay growth is limited to the number of compatible devices in the market. Today, only iPhone 6 and 6 Plus users can use the technology, but that will change once the Apple Watch becomes ubiquitous in the market. Given the amount of retailers that have partnered with the company, the product is already enjoying widespread endorsement.
Morgan Stanley research forecasted that in 2017, 14 percent of Apple’s revenue will come from mobile payments. The investment bank also predicted that $2.2 trillion in purchase volume will be transacted through Apple Pay that year. For the sake of comparison, Business Insider pointed out that global payment volume through Visa’s network was $4.76 trillion in 2014. If the forecasts hold true, it means Apple Pay will have the potential to actually compete with traditional debit and credit cards. That would signal a major permanent shift in consumer behavior.
The US will lead the charge with mobile payments over the next few years
Given that Apple Pay will only be available in a handful of markets by the end of 2017, noted Business Insider, it is assumed that half of Apple Pay volumes will come from the U.S. alone. In order for that to happen, however, $1 in $5 spent in retail in the U.S. would have to go through Apple’s system. Currently, mobile payments, such as Apple Pay and CurrentC, are forecasted to account for only 7 percent of all U.S. retail activity in 2017. Regardless of the variance in estimates, it is clear that Apple Pay and other mobile payment systems are poised to become very popular over the next two years. If a fifth of all retail transaction volume goes through Apple Pay and other systems, as previously mentioned, it would represent a monumental evolution in the history of the payment industry. It will be interesting to see how this situation unfolds.
Apple Pay is the go-to mobile payment service for retailers and the government
The Christian Science Monitor indicated that one of Apple Pay’s biggest strengths is its popularity. It is the most visible product in terms of media attention, and it is helping promote awareness of digital wallets in general. By early March, the number of retailers that accepted near-field communications mobile payments grew to 700,000. Additionally, as of last month, 50,000 Coca-Cola vending machines will accept payment from the service as well. Other notable events include Marriott International endorsing Apple Pay and the U.S. federal government accepting payments from the technology at national parks. Some gas stations have even enabled payment using the product. Apple Pay already works seamlessly for in-app and online purchases, but more retail partners are sure to be added as well. A recent study found that so far, approximately 6 percent of iPhone 6 and 6 Plus users are using Apple Pay. That number will only go up from here.
Consumers stand to benefit from advances in mobile payment technology because products like Apple Pay are safe to use. To prevent credit card fraud, such as the theft that occurred at major retailers last year, Apple Pay uses tokenization to encrypt transaction data and ensure that information stolen from a point of sale device cannot be used for illegal activity. Fingerprint authentication adds another layer of security.
Using one centralized platform to manage payments is convenient. Instead of carrying several credit card accounts simultaneously and constantly reaching for a wallet, Apple Pay allows consumers to add their cards to the service and simply wave their mobile devices in front of NFC-enabled scanners. Loyalty program cards can be added to the service as well. The only question remaining is: Why not use Apple Pay?Back To Blog