Apple cash-in on the mobile payments market

By Nicole Miskelly | 21 October 2014

As of yesterday, if you live in the US and have an iPhone 6 you can start making payments with your fingerprint or by holding the phone over an enabled Point of Sale (POS) system. The new NFC payment system can only be used in the US at the moment and is only compatible with iPhone 6 and iPhone 6 Plus. As well as making payments in fast-food restaurants such as McDonalds and Subway, the digital payment service will eventually be available on iPad and users will be able to make online purchases through the Touch ID fingerprint reader.

Apple Pay is supported by three major credit card companies: Visa, American Express and MasterCard. In order to use Apple Pay your card issuer (usually your bank) has to support the payment system and since announcing Apple Pay in September, Apple says they have signed up over 500 banks to use the service. Apple Pay can be used at 220,000 retail and restaurant locations in the US and the Financial Times (FT) reports that Apple has surpassed Wall Street forecasts on revenues, earning and iPhone sales in its fourth quarter results. On the same day as launching Apple Pay, the company also disclosed a 12 per cent growth in revenue, the strongest rise in sales for nearly two years.

According to the FT, Apple’s sales results reached $42.1bn in the three months leading up to September 27, which beat analysts’ expectations of around $40bn.  Apple’s Chief Executive, Tim Cook is extremely pleased with the figures and believes that iPhone demand is going to increase. “It’s very unusual to see every country having a marked improvement over the previous year and that’s what we’re seeing on iPhone,” said Cook.

Amid the growing completion in the mobile payments marketplace, from companies such as Ebay who announced plans to spin off their PayPal payments unit as a standalone group, and Google Wallet which failed to make an impact on the market, Apple seem hopeful that the extra security and privacy capabilities will differentiate Apple Pay from these other payments services. However, amongst the obvious similarities between Apple Pay and Google Wallet such as the ability to hold multiple credit cards in the system, Google Wallet has no finger print recognition, so does this make Apple Pay more secure?

According to the FT, analysts predict that the rise of mobile payments will prove to be disruptive for banks whose ageing systems are already under strain from the demand of online banking apps and many US banks are racing to persuade users to choose their card as the default option under Apple Pay.

All Apple need to do now to gain seniority in the mobile payments space is to take Apple Pay global, which may not be too far off because as the FT reports,  Apple hired Carol Harris (former Visa Europe’s Director of Mobile) last month, to lay the groundwork to launch Apple Pay in Europe. 


By Nicole Miskelly, bobsguide Lead Journalist

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development