Apple Pay Now Accounts for 5% of Global Card Transactions

It may have taken more than half a decade but it seems that Apple Pay is making major inroads. As Quartz reports, Apple Pay share of transactions are on the rise and could reach even larger milestones in the years ahead. Currently Apple Pay payments account for 5% of global card transactions according to data from Bernstein Research. However that’s poised to double in the next five years, potentially reaching 10% by 2025.

The recent growth Apple Pay has seen can partially be attributed to the launch of Apple Card last summer. That credit card — a first for the company as well as their partner Goldman Sachs — strategically offers 2% Daily Cash on purchases cardholders make using Apple Pay versus 1% for payments made using the physical card. Another factor is iPhone users without an Apple Card have few mobile wallet choices outside of Apple Pay. In addition to the feature being pre-installed on Apple products, it’s the only NFC payment option available on these devices. That said other third-party mobile payment solutions may utilize other technologies such as using the phone’s camera to scan QR codes or having users display scannable codes on their screen. This not only gives Apple an advantage over companies like PayPal but also primes them to further expand. As Bernstein analysts note, “There are indeed plenty of reasons to worry that Apple may attempt to disrupt the payments ecosystem.”

According to 9to5Mac, Apple earns .15% of each Apple Pay purchase. As a result, Apple’s services division (which includes Apple Pay) has delivered greater revenue to the company as of late. Quartz notes that the company’s fiscal Q1 2020 earnings show services bringing in $12.7 million. That’s up 17% from the year prior.

Of course the gains for Apple Pay correlate to an increase in contactless payments in general. Recent data from Juniper Research suggest such transactions are on track to triple from $2 trillion this year to $6 trillion in 2024. Moreover contactless transactions in the United States are anticipated to climb from $178 billion today to a whopping $1.5 trillion four years from now.

While these projections would suggest there’s good news ahead for Apple, it’s also possible that their dominance could lead to greater regulation and scrutiny. In fact the European Commission has already been prying into whether Apple’s NFC restrictions violate EU antitrust laws. Regardless of what happens on that front, it’s clear that Apple’s efforts are helping push mobile payments forward — and that’s good news for FinTech and other payment disruptors.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Top 10 Personal Finance Articles of the Month — June 2022 

It’s time again for one of my favorite features here on Dyer News: a look at the top 10 personal finance articles of the month. To start, we'll take another look at financial independence and freedom. Then, with the housing market going a bit crazy lately, we'll feature a pair of articles on home buying. Lastly, we'll cover tips for one-income households, finance after death, fighting inflation, and more. As...

Bilt Rewards Launches Travel Portal with Benefits for Cardholders

Last year, the startup Bilt made a splash when it announced a new service that would reward users for paying their rent. That premise was then expanded upon with the launch of the Bilt Mastercard, which is issued by Wells Fargo. Now, continuing to capitalize on both the hype of their product and the demand for travel, Bilt has debuted another new offering for customers. This week, Bilt Rewards announced...

Cash App Introduces Round-Up Investing Feature for Debit Card

Debit card customers looking to grow their investments gained a new, automated option today as Block Inc. (formerly Square Inc.) officially announced a new feature for its popular Cash App. Now, customers with the Cash App Cash Card can opt into Round Ups as a means of growing their investments. When this feature is toggled on, Cash App will round up debit card purchases to the nearest dollar and invest...