Apple Pay, the Cupertino-based giant’s mobile wallet, is amassing a significant chunk of card payments around the world. The growth of the service is posing a considerable challenge to rivals like PayPal and competition watchdogs are starting to pay attention. Bernstein, a research firm, said in its research note, “Apple Pay is indeed one of the long-term competitive threats to PayPal.”
As per the data by Bernstein analysts, Apple Pay is currently responsible for about 5% of global card transactions. Quartz details that at its current growth rate, by 2025, Apple Pay is expected to rise to 10% of global card payments.
The payments industry poses a massive opportunity for Apple, whose iPhone sales are declining gradually. As detailed by Quartz, Apple’s services unit generated over $12 billion in revenue over the last three months of 2019, which is a 17% increase from 2018.
Bernstein researchers state it’s likely that Apple might try to shake up the digital payments industry which represents a humongous $1 trillion in revenue around the world.
Apple Pay takes a tiny portion of each transaction that it processes. Since users can store and use their debit and credit cards from the app, it has the prospect to become a consumer’s primary payment method.
Quartz points out that Apple, by pre-installing the app on iPhones and taking control over the device’s NFC technology, tries to block competitors from offering similar services. This strategy has led to its growing popularity.
Juniper Research points out that contactless transaction is forecast to reach $6 trillion globally by 2024, contributed by Apple Pay.