Comment: Apple Pay income is streamer toward a multi-billion dollar business


Apple Pay income hasn’t gotten many courtesy so far. The many profitable purpose Apple Pay plays for a Cupertino association is serve lock-in to a ecosystem.

Once you’ve gifted a preference of Apple Watch payments in particular, and know a confidence we get from a use of Apple Pay on any device, it’s not something you’ll wish to give up. (Sure, there’s Google Pay and Samsung Pay too, though it still adds attrition to switching platforms.)

But a news news yesterday stirred me to do some back-of-an-envelope calculations, and we reckon Apple’s mobile wallet use is fast headed toward apropos a multi-billion dollar income stream…

It was yesterday estimated that Apple Pay now accounts for a towering 5% of tellurian label transactions, and that a series could strike 10% by 2025.

The Financial Times reported in a run-up to launch that Apple takes a 0.15% cut on all Apple Pay transactions.

[Banks] are also profitable tough income for a payoff of being involved: 15 cents of a $100 squeeze will go to a iPhone maker, according to dual people informed with a terms of a agreement, that are not public. That is an rare deal, giving Apple a share of a payments’ economics that rivals such as Google do not get for their services.

Estimating a sum value of that cut involves a lot of scribbling on a backs of envelopes. But let’s try for an demonstrative ballpark, during least.

The 2019 Federal Reserve Payments Study estimates a sum value of US label exchange for 2018.

Total label payments grew to 131.2 billion with a value of $7.08 trillion in 2018, adult 29.7 billion and $1.56 trillion given 2015.

Call it $7T in turn numbers. If 5% of those payments are done around Apple Pay, afterwards that’s $350B value of transactions. If Apple takes 0.15% of that, afterwards it done a cold $525M in 2018. If Bernstein is right that a commission doubles to 10% by 2025, afterwards that’s a billion-dollar business – from one nation in one year.

We don’t have allied Apple Pay use estimates for other countries, and we’d need to demeanour during sum label exchange in any nation and … well, that’s a tyro topic right there. But contracting a best recommendation we ever review on safely creation predictions (‘give them a series or give them a date, never both’), it seems to me we can safely contend that Apple Pay income is headed toward a multi-billion dollar business.

Not bad for giveaway money.

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