“Apple Pay almost got buried in the blowout profits of Apple’s first fiscal quarter reported today,” Robert Hof reports for Forbes. “But while Apple’s new mobile wallet surely won’t contribute to those profits anytime soon, if ever, it’s clear that new iPhone 6 owners like it. A lot.”
“During the company’s earnings conference call today, Apple CEO Tim Cook said Apple Pay accounts for about $2 of of every $3 spent using contactless payments across Visa, Mastercard, and American Express,” Hof reports. “‘We are more confident than ever that 2015 will be the year of Apple Pay,’ Cook said.”
“Whole Foods, he said, has seen a 400% jump in mobile payments since the October launch of Apple Pay, even though it can accept other mobile payment schemes such as Google GOOGL -2.83% Wallet,” Hof reports. “Panera Bread says Apple Pay is responsible for 80% of its mobile payments”
Read more in the full article here.
MacDailyNews Take: Sleep tight, CVS.
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CVS will sooner than later accept Apple Pay. iCal me.
They had better do or else they will never dispense another pill to me. Nor sell me lipstick or paper plates or anything at all.
> But while Apple’s new mobile wallet surely won’t contribute to those profits anytime soon, if ever…
Apple Pay is yet another Apple “value-added” customer service that helps to sell more Apple hardware products (iPhones in this case). And its positive impact on iPhone sales (as a differentiator over what the competition can offer) will only grow over time. It’s an Apple exclusive.
It may make a profit (eventually), but it’s not meant to be a “profit center.” And that’s the key difference. For Apple’s competitors in this new market, their payment service MUST be their profit center, or there’s no point. Because the service itself must make money, they are going to be annoying and intrusive (such as by tracking your usage patterns to sell you more stuff). Apple Pay just wants to make your iPhone user experience better; once again, the motivations of Apple and its customers are perfectly aligned.
I don’t know the percentage cut that Apple gets from every Apple Pay purchase, but even a small amount adds up over billions of dollars worth of purchases. I agree that the big money is associated with the contribution of Apple Pay to the attractiveness and “stickiness” of the Apple ecosystem and the resulting effect on sales of Apple products. But I could see Apple earning quite a bit from Apple Pay for decades to come.
They talked similarly about iTunes I seem to remember, not so small fry now is it.
It’s really small, 0.0015 cents per dollar. That means $100B in transactions nets just $150M. Its value to Apple well exceeds what it will bring in directly. Once you’ve used it you don’t want to be without it. The brand loyalty and new sales are the big payoff.
Great post, but I’d like to add, that ApplePay is basically the poster child being used by the financial institutions to promote and proliferate the adoption of new, more secure payment transaction protocols.
As more and more banks, POS “middleman”, retailers, and digital “wallets” jump on this bandwagon, all consumers – not just Apple’s – stand to benefit.
Every single vendor I run into without Apple Pay, I make a comment. Um so when are you going to get Apple Pay. I know the clerk can’t do anything about it. But it’s the message. Enough commends at the register are bound to be heard upstairs.
I agree completely. I do the same.
iTunes or APP Store solutions were not designed to make a profit either, correct?
All about value and the total package in my opinion!
Apple Pay, Apple Pay, Apple Pay… This IS and will be selling even more iPhones. Security. That’s wha’ we’re needing boys.
“But while Apple’s new mobile wallet surely won’t contribute to those profits anytime soon, if ever,”
-On the contrary; The primary reason I upgraded from the 5S to 6 was for Apple Pay.