Apple Pay is proliferating, and the banks are scared

“Apple Pay was never intended to be a five minute route to success, but a major infrastructure roll-out that will (eventually) lead to much greater prizes,” Jonny Evans writes for Apple Must.

“That’s why Barclays CEO, Jes Staley, is already warning that tech companies are coming to eat their lunch,” Evans writes. “In the face of deep opposition from Apple Pay and other tech, ‘All the banks are very focused on the payments space. That may be where the battleground of finance is fought over the next 15 years,’ Staley said.”

“He’s right to be concerned. Apple Pay may only be grabbing small amounts of transactions in some terms, but those small amounts soon grow,” Evans writes. “Apple is also taking steps to create its own tech currency, with Apple Pay Cash. Apple Pay Cash lets you pay people using iMessage.

Read more in the full article here.

MacDailyNews Take: Apple’s playing the long game here. The traditional banks are right to be scared.

New Zealand’s BNZ launching Apple Pay after customer feedback shows demand – October 9, 2017
Apple Pay likely to get boost from Visa and Mastercard mandating contactless payment terminals – August 21, 2017
Apple Pay usage estimated to rise sharply in United States due to frustration with slow Chip-and-PIN cards – August 21, 2017


  1. USA is way behind on this, of course. In Canada it works everywhere. I was out of the country until July 1 this year. I still have all the cash in my pocket that was there when I returned. My Apple Watch has been busy. I love it. It has completely eliminated huge piles of coin in my pocket. Apple Pay is limited to $100 at a go. then I whip out my debit card. That’s happened only a few times. Love it.

      1. I was in Canada about a year ago and used Apple Pay in a number of small restaurants and large retail stores around Toronto, Montreal and small towns too. I paid by Apple Pay in every branch of Tim Hortons that I visited.

        A hotel I stayed in would have accepted it and so would the car rental company, but I couldn’t use it as at that time my bank wouldn’t allow purchases of more than about $40 via Apple Pay, but that limit has since been done away with.

        Acceptance of Apple Pay seemed quite widespread in the parts of Canada I visited, but stopped abruptly once I drove into the US.

        A friend on mine is a Native American living in Canada. He and his wife sell a wide range of stuff at pow-pows during the summers. He accepts Apple Pay on his stall and it accounts for quite a lot of his transactions these days. Many of the other traders use it too because it’s so easy to use.

  2. I have to be honest, the few times I have used it, it wasn’t any more convenient than using a card. I doubt very much that the banks are too concerned (particularly considering the average American’s level of debt), this is just the hype machine.

      1. With the Apple Watch having increased 50% year over year, has 80% of market watch profits and 50% of the watch market, yes the banks should be concerned. With a new hardware/software update (LTE isn’t the only thing), Airbuds (that don’t fit me–argh), and Christmas, ’18 is going to blister for the A-Watch and Apple Pay will really start to roll.

    1. Compared to swiping a card, it’s not much different. But now that chipped cards are here, Apple Pay is much faster. Some chip readers are approaching swipe speeds, but some are painfully slow (45 seconds). Apple Pay is never slow—though it is kind of dumb that you have to sign for some purchases, considering that you’ve just authenticated with a fingerprint. Not that fingerprints are unspoofable, but they’re much harder to spoof than a signature…

    2. As a small business owner, I love it when folks use ApplePay or GooglePay. It is so fast. No signing, no reciept – just an email. Cuts the payment processing time 5 or 6 fold. Remember, time is money.

      1. For many years I’ve been going to a supermarket in the UK where customers pick up a hand held scanner and scan the barcodes as they put their goods into their own shopping bags. At the till, the scanner loads the items and asks for payment.

        I now find that since I’ve been using Apple Pay, the longest process at checkout is the printing of the paper receipt ( which I don’t need – I’d be happy for them to e-mail it to me instead ).

        It’s quite common to walk straight to the checkout ( there’s rarely anybody queuing at the scan as you go checkouts ) with a trolley full of shopping and to pay and be on my way within 20-30 seconds. Just one second is taken with Apple Pay, the rest is the time taken by the terminal downloading the list of purchases, printing the till receipt and similar stuff. If they got their act together with the checkout technology, they could easily half that time spent at the checkout. but I doubt that customers care very much whether it takes ten or twenty seconds to check out.

        I also see traders on the local farmer’s market accepting Apple Pay and they love it because it’s so quick and reliable, with no need to take that cash to a bank afterwards. It also produces data which can be exported into their computerised accounts systems, which saves on accountancy fees. Many small traders would be glad to do without having to take money to the bank as it’s a security risk, takes time and they have to pay bank fees. The major exception being those who prefer cash to avoid the tax man.

        The London Tube ( underground railway ) has accepted Apple Pay almost since Apple Pay was launched and it’s so convenient to simply walk into a Tube station, use Apple Pay to check in and check out of the entry and exit gates and then at the end of the day, their computer looks at all the journeys you ended up making and charge you the cheapest deal for the journeys made.

        The banks could have devised something like Apple Pay, but they clung onto older technology and left a vacuum for somebody else to fill. Both nature and Apple are known to abhor a vacuum and when Apple Pay was launched, banks placed plenty of obstacles in it’s path, but it’s now become so ubiquitous that there’s nothing the banks can now do to stop it and it’s undermining some of their business.

        I’ve often pointed out how Apple quietly places all it’s ducks in a row and few people realise what they’re up to until their final move. Those Apple Pay ducks have been sitting in a nice straight line for a while now.

        Apple keeps continues to play the long game in a world full of people who are only looking at the short game.

    3. It isn’t really supposed to be more convenient. It is designed to be far more secure, meaning you no longer need worry about someone looking over your shoulder to read your PIN, or skimmers, or Joe Badguy who services S-Mart’s computers from stealing your account numbers.

  3. “Apple’s playing the long game here.” Yeah, that game has worked pretty good for Mac vs. Windows.

    Best wishes to Apple Pay, but I won’t hold my breath. It will be a better item, like a Mercedes, Bugatti, or Ferrari, but not a top dog like a Toyota, Honda, or Chevrolet. Kind of like the iPhone, the better product with the smaller market share.

    1. Actually it HAS worked really well for Mac vs Windows. If you focus only on market share of unit sales, yes, Windows is winning. But Apple doesn’t care about that and never has. The Mac now generates about 50% of the profit share of the personal computer market. Windows manufacturers all have to compete on price, and Apple doesn’t.

      And of course in mobile, at one point Apple had more than 100% of profit share because all of the other mobile companies, in aggregate, had negative earnings in the mobile space. That might still be true; I’m not sure.

      1. Looking only at Fiscal Quarters makes it difficult to tell who is leading/falling in profit share due to devices being released at different times over the course of a year. I found 2 articles that specifically reported the profit share for the fiscal year. The first for Y2015 and the second for Y2016 shows Apple’s global smartphone profit share to be 91% and 72% respectively. Looking at the larger scale, it seems Android OEMs are getting better at generating a profit from their devices in recent years.

      1. Apple charges the banks for Apple Pay transactions, there is no handling charge or fee for the retailer or customer. The actual fee is confidential, but is rumoured to be somewhat lower than what it costs the bank to perform the equivalent service themselves.

        Don’t forget that Apple is not only handling those transactions, but also guaranteeing their security. Fraud with existing systems is a costly drain on profits and Apple are so confident that their system is secure that they accept liability for fraudulent use. That in itself makes it a hugely attractive proposition for banks, even if it leaves a nasty taste in their mouth to pay money to others. Cheaper solutions always appeal to banks.

        If the banks want to eliminate Apple Pay, they will need to devise an alternative which is as convenient, secure and cost effective as Apple Pay has proven to be.

  4. ApplePay is a great payment experience but Apple apparently wants to keep it a secret. No POS push, no bank promos, no rewards system, no merchant promos. No prominent placement on Apple’s sad mobile maps app. In fact try and find any app, map, list, etc that tells you where ApplePay works. Simple give-a-shittedness could catapult usership and become a virtuous attraction for merchants.

    “Not meant to be a quick success”? “The long game”? Yeah because money in the future is so much more valuable than today. Cook has such a lack of commitment to almost anything he touches. There is no lack of resource, just a lack of vision, attention to detail and basic blocking and tackling all the way down the field. The product manager needs to be kicked to the curb.

    How bad? True sad story is that last week I needed to send my AppleTV in for replacement under a warranty in which case they take payment in full in advance – their own site has apparently never heard of ApplePay.

    1. That may be your experience where you live, but elsewhere in the world we don’t need lists of where we can use Apple Pay because we use it pretty well everywhere.

      In Europe, Canada and much of the rest of the world, if the terminal accepts contactless payments ( which virtually all do ), then Apple Pay is supported. If you can’t use Apple Pay locally, it’s because your retailers or banks choose not to support it.

      Apple does not charge the customer or the trader any processing fee and only charges the bank a tiny fee, which is lower than it costs them to perform an equivalent service. Therefore there is no profit margin available to pay for lavish marketing, promotions or rewards.

      It’s your money that ultimately pays for a rewards scheme and any rewards scheme only pays back a tiny proportion of the money levied from handling your transaction. It’s a much smarter proposition to do away with promotions and rewards so that everybody saves money overall.

      1. Yup, it’s accepted throughout London and the UK ..London taxis accept it – just touch and go! Now that British Airways charges (in many cabins) for food, you can just pay with Apple Pay.
        As alanaudio says, you can use it on the Tube (London’s metro/subway) but also on London region main line trains: just touching go at the yellow discs on platforms.
        Travel anywhere in London using Apple Pay.

        1. It’s not just British trains that accept Apple Pay, the iconic London buses also accept Apple Pay. The charge is a flat fare of £1.50 ( around $2 ) and if you change buses there is no additional charge for one hour after boarding that first bus. If you use it for a week, you will automatically be charged at a lower weekly rate for your journeys. Apple Pay is also accepted on trains, buses, ferries and on toll bridges in many areas of the UK.

          It’s great for foreign visitors because it’s so simple to use and if you don’t speak the language, you don’t have the embarrassment of having to ask at a booth for tickets and pay with unfamiliar coins and notes.

  5. Fined-For-Crimes banks are whining that the customer is benefitting from Apple Pay. What else would these abusive bums do? Boohoohoo. 😹 *sniff*sniff*

    Would that they had been broken up for their dirty doings over the past decade.

    Thank you Apple!

    1. Your name implies and ability not well supported by your post. Apple Pay relies on bank networks (credit / debit cards) and won’t ever “kill” them. The rest of your post is further nonsense.

  6. You can type “Apple Pay” into Maps and it will bring up local businesses that accept it. It is a long game and in about a decade it’ll be ubiquitous. And guess what? The next time there’s some big security story where Apple Pay is also accepted, Apple’s customers will likely be unaffected.

    1. If you’re talking about stores that get hacked, chipped card users also won’t be affected for the same reason that like Apple Pay only tokens are used for the transaction.

    2. I didn’t know that you can type ‘Apple Pay” into Apple Maps to see nearby retailers accepting it.

      I tried it and it works, but in my town ( in the UK ), it only shows a tiny proportion of the businesses accepting it and none of the places where I regularly use it are shown. About forty businesses get flagged up, but in reality virtually every business around here accepts Apple Pay.

  7. What is crazy about US banks is that took year to implement the chip but were too lazy (or scared) to make customers use a PIN.
    The key thing with Apple Pay is the security. Eventually the banks will realize they will make more money because they are having to deal with less fraud.
    I use Apple Pay whenever I can. Saves time and less chance of being screwed.

  8. Hell someone who actually understands the market well done Jonny Evans. All we got for ages was how ApplePay was failing because it didn’t have 20+ of the market blah, blah, blah when as he says this is a long term plan looking towards the 2020s rather than instant impact. Indeed instant impact was pretty much impossible considering the hurdles, regulatory, competitive, political and consumer education amongst them that would need to be overcome. Some people really do need to understand that Apple amongst other companies have to do a lot of work to set the ground work for future success and everything can no longer be judged on the latest computer/device offering instant gratification as things used to be in Apple’s business model.
    Even in a more traditional Apple product a similar reaction was made against Apple Watch when clearly even that was going to take time to develop as the idea was ahead of the available technology to do the things it would eventually grow into.

    So be they users or analysts, even the trolls (but then they have a different motivation) there really does need to be a sea change in attitude to where tech is going (has gone) and the wider platforms and services tied in to their success be it now or some time in the future.

  9. Adoption of Apple Pay varies from one country to another. In some countries it’s nearly universal, while in others ( including the USA ) it’s more of a rarity.

    It’s the same Apple Pay that is winning in some places and failing to win in others. What is different is the attitudes of banks and retailers in those areas.

    There are comparisons to be made with the music industry, who were flailing around unsuccessfully trying to combat pirated MP3 downloads until Apple introduced a simple and fair alternative. Apple made it easy to download music at a price which was fair to both customers and artists. Inevitably there was resistance and disputes about the pricing structure, but eventually the music industry realised that there wasn’t a better alternative.

    When your local banks and retailers finally discover that there isn’t a better alternative they will adopt Apple Pay, just as others elsewhere already have done.

  10. Something I am noticing more often is that the big banks and clearing networks are dragging their ass clearing transactions- something last seen in the dark days of the 2008 Bush Depression and market meltdown.

    In 2017, it should not take 4-5 days to clear a transaction on a chip card or via Apple Pay. They are doing this to keep cash in the float to make money off of it. Yes, there are ways to make money on very short holds if you are a money center bank.

    Banking desperately needs disruption and the Dinosaurs are not learning how to tapdance. I also would love to see Apple disrupt the online payments sector. Entergy and CenterPoint- 2 of my utilities- charge like $2.50 through an outfit called BillMatrix just to pay your bill online. That is complete bullshit. I would love to be able to pay my utilities via Apple Pay and avoid these rip offs.

    1. Yes, banks make millions off those free loans. If their average daily new float is, for example, $100M, then if they can hold it for three days then that’s effectively a permanent $300M free loan they enjoy.

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