Apple is becoming a formidable fintech company

“A growing anxiety for bank executives is how and when big tech companies will encroach on their turf,” John Detrixhe writes for Quartz. “During its quarterly earnings call yesterday, Apple CEO Tim Cook gave some insight into the company’s progress in becoming something of a fintech player: Apple Pay transactions tripled from a year earlier, to more than 1 billion. Cook said that was more than Square and exceeded mobile transactions via PayPal.”

“The worry for finance executives is that payments are just the beginning,” Detrixhe writes. “Alibaba affiliate and fintech giant Ant Financial expanded from payments and into wealth management.”

“According to analysts at research firm Bernstein, the Chinese company now runs a robo-advisory service that uses artificial intelligence based on payment activity to suggest investments,” Detrixhe writes. “‘The core payments service acts as a gateway to a broader use of service,’ the analysts wrote. ‘This is a model other tech companies could follow.'”

Read more in the full article here.

MacDailyNews Take: Juniper Research projects Apple Pay will have 227 million users by 2020, or more than Android Pay and Samsung Pay combined.

Sleep tight, bankers.

Driven by Apple Pay, contactless payment systems to represent 1 in 3 in-store transactions globally by 2020 – Juniper Research – July 30, 2018
eBay to accept Apple Pay – July 24, 2018
Apple debuts ‘Summertime savings with Apple Pay’ with exclusive offers thru August 1st – July 20, 2018
Apple Pay dominates with far more users than Samsung Pay, Google Pay, and other OEM pay systems combined – June 27, 2018
Apple teams with Goldman Sachs on new ‘Apple Pay’ credit card due early next year – May 10, 2018
10% of young adult Americans have used Apple Pay in-store, well ahead of rivals – February 28, 2018
Apple Pay Cash international roll out begins – February 23, 2018
Apple Pay users more than double globally, but only 16% of iPhone users have activated Apple Pay – February 22, 2018
Apple Pay now accepted in 50 percent of U.S. stores and is the world’s most accepted contactless payment system – January 31, 2018
watchOS 4.2 delivers Apple Pay Cash to Apple Watch – December 5, 2017
Apple Pay now in 20 countries, takes 90% of all contactless payments where active – October 24, 2017
Apple Pay is proliferating, and the banks are scared – October 18, 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. I doubt whether there is much profit being made via Apple Pay at the moment, they don’t charge much for the service. My guess is that Apple Pay wouldn’t look at all impressive when shown as part of a spreadsheet. Apple doesn’t offer much detail in it’s financial reporting anyway, but there is nothing to be gained by going into detail about Apple Pay.

      The real value for shareholders is the way it strengthens the ecosystem, which solidifies demand for Apple devices, which in turn boosts demand for Apple services.

      However, having said all that, it’s not so long ago that I and many others were saying that iTunes only generated a negligible profit for Apple and it principally existed to drive hardware sales.

      1. You don’t need to make much per transaction if you have billions of transactions before it starts to add up. The verification process is a vital part of credit card transactions and is a paid service. Apple Pay does it more securely than anyone. It should make money. Now, how much Apple?

        1. Card transactions amount to about $25 Trillion per year world wide, just a bit more than cash transactions and are continuing to grow faster.

          Apple makes .15% (yes, less than 1%) per transaction.

          If Apple were to get 10% market share of card transactions, that would be $2.5 Trillion, resulting in $3.75 Billion annually gross to Apple.

          Of that $3.75 Billion, Apple would have to pay marketing, support, infrastructure and client-side development.

          I’m guessing based on all of this, that Apple Pay at most could lead to $1-$2 Billion annually to Apple’s bottom line accounting for roughly 2-3% of Apple’s total income.

          But it’s a very long way between here and getting 10% of card transactions. Getting to 10% makes all kinds of assumptions including that “cards” themselves go away and almost all transactions are handled by phone/account.

          In the meantime, it’s just a service that adds value to owning an iPhone.

    1. He who sees evil everywhere else should turn his eyes inward, for the seed of evil may be embodied within him.

      I just made that up! Pretty good, huh?

      Banks are not evil. The Fed is not evil. This binary fixation that everything is either supremely good or vilely evil is a trap that is destroying this country.

  1. Kinda wish they’d fix Apple Pay at randells grocery store in Houston Tx, at FR 1960 and champion forest. I’m the one getting the dirty looks from customers behind me when it’s not been working for months at that location.
    Anyone I can inform about that? That’s the ONLY place that Apple Pay is down, and I use it wherever I can.

    1. Thanks for contacting Randells support. We should have Apple Pay up and running again later in the week. Please make sure any other issues you have with our Randells store are posted here on the comments section of MDN. For other Randells store locations, please see the comment sections in the appropriate news aggregators for those stores.

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