Apple Pay Growth Hints at the Future of Digital Wallets

Yolanda Curtis
February 15, 2020

The European Commission is now investigating Apple's control over the iPhone's near field communication tech that allows the phone to make contactless payments - it is only available for use by Apple's own software.

The app report by Juniper Research said Apple Pay would account for 52 per cent of that type of transaction by 2024, up from 43 per cent today.

By 2025 Apple Pay could account for 10% of global card transactions. European antitrust authorities have also raised concerns about Apple Pay, according to Reuters. Credit card companies Visa and MasterCard process over US$14 trillion payments every year. Some of its offerings within that Services bucket are seeing more success than others at the moment, such as Apple Pay. Apple, in response to a request for comment from Business Insider, said that it prioritizes customer security and privacy and that allowing other payment processors to access NFC on its devices NFC could create a risk for users.

Research firm Bernstein compiled and projected the trend data.

"Apple Pay is really a long-term competitive threats to PayPal", say analysts at Bernstein.

"There are indeed plenty of reasons to worry that Apple may attempt to disrupt the payments ecosystem", Bernstein analysts wrote in a research note, Quartz reports.

Apple makes money from its payment wallet by taking a tiny fraction of every transaction made using an iPhone, iPad or Apple Watch.

Last year, Apple and Goldman Sachs released the Apple Card, which encourages cardholders to use Apple Pay by giving 2% cash back when users make a purchase on the card using Apple Pay, but only 1% if they use the physical card. 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.

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.

Apple said that over 70% of merchants in the United States accept Apple Pay, while that number jumps to 99% in Australia.

For most iPhones double pressing the home button will bring up the Apple Pay function, which will use your fingerprint to confirm the transaction.

There's no shortage of slick, feature-rich payment apps out there, but Apple Pay has several advantages. That's why Apple Pay is the only iPhone mobile wallet that can make NFC transactions.

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