Editorial: Apple Pay passes PayPal, tramples Google Pay & Samsung Pay

AppleInsider · October 31, 2019 2:48PM

Apple Pay transactions reached above three billion in the September quarter, enough to surpass PayPal. Apple Pay growth is also leaving behind far less popular Android NFC payment alternatives promoted by Google and Samsung.

During the company's Q4 earnings call yesterday, Apple's chief executive Tim Cook hailed the launch of its new credit card and noted record revenues from payment services, stating that Apple Pay revenue and transactions had "more than doubled" over last year.

Cook reported that Apple Pay transactions are growing four times as fast as PayPal, adding that Apple Pay is now "live" in 49 markets internationally, "with over 6000 issuers on the platform."

Being "live" in a market means that domestic banks have adopted Apple Pay and are offering it to their customers. For users who have already opened an Apple Pay account, the service works virtually anywhere NFC payments are processed, regardless of whether Apple Pay is actually "live" in a given market.

"We believe that Apple Pay offers the best possible mobile payment experience and the safest, most secure solution on the market," Cook said. "We're glad that thousands of banks around the world participate."

Even fake data couldn't keep Apple Pay down

Last week, a U.S. study by eMarketer claimed Apple Pay had just overtaken the Starbucks apps in monthly users, based on its survey asking if participants had made "at least one proximity mobile payment transaction in the last six months using a smartphone."

That bizarre metric was initially created to make the claim in May 2018 that Apple Pay would still be trailing Starbucks in users by the end of 2018, while also reminding people that Samsung Pay was accepted in more places, thanks to its mag stripe emulation that allows it to work on terminals that don't support NFC.

The only reason for including the Starbucks app in a conversation of mobile payment systems would be to suggest Apple was behind in something. It also distracted attention from any direct comparisons with Google Pay and Samsung Pay, which had only about half the users of Apple Pay despite their having been around longer. Starbucks app doesn't even use NFC; it uses barcodes. And most Starbucks locations also accept NFC payments.

These estimates ended up being dramatically wrong

According to the marketing group's data, its forward-looking estimates from last spring (above) guessing at payment adoption by the end of the year -- and extrapolating the market out to 2022 -- were not even remotely correct. Apple Pay had exceeded Starbucks transactions by the end of 2018 in the U.S. by a margin of more than four million people.

And more significantly, Google Pay and Samsung Pay had fallen further behind Apple. Apple Pay reached a level of adoption in one year that the firm hadn't predicted to occur until some point after 2022.

The firm's most recent data now states that Apple Pay users in the U.S. have grown by 8.3 million users, or more than 37.7% since its estimate last year, while Google Pay users had only increased by 1.1 million, or 9.9% and Samsung Pay users had increased by just 9%, by 900,000 users. The fact that Apple Pay has been seeing its NFC user growth increase 7 to 9 times faster than Google and Samsung is certainly more noteworthy than comparing Apple Pay use to a coffee shop barcode app.

"Apple Pay has benefited from the spread of new point-of-sale (POS) systems that work with the NFC signals Apple Pay runs on," eMarketer analyst Yory Wurmser stated. "The same trend should also help Google Pay and Samsung Pay, but they will continue to split the Android market."

The marketing survey counted any user who said they'd used a proximity payment service at least once in six months, but Cook's data showing that Apple Pay transactions and revenues had "more than doubled" is far more significant because it indicates continued use by a large installed base, not just some occasional curiosity use.

Apple Card pays you to use card for Apple Pay

Beyond an incremental increase in NFC terminals -- that is somehow helping Apple Pay without much discernible impact on Android NFC user growth or adoption at al l-- another new strategic driver of Apple Pay is the company's own new Apple Card, which it just launched in the U.S. in August.

Apple first unveiled the new credit card, issued by Goldman Sachs as a MasterCard paired with new security features, at its Services Event in March. Yesterday, Cook stated that "we believe this has been the most successful launch of a credit card in the United States ever."

Anything you buy with Apple Card via Apple Pay is presented in a summary of your finances

In addition to promoting NFC Apple Pay transactions from iPhone and Apple Watch simply by offering centralized, secure reporting of a users' transactions on their devices, Apple Card also incentivizes electronic payments by offering users additional "Daily Cash" back payments of up to 3% when used to buy products from Apple, or partners including Uber, Uber Eats, Walgreens, Duane Reade and T-Mobile.

Apple credits users' Daily Cash to their parallel Apple Pay Cash account, which can be used to make free transfers to other iOS users via iMessage. Daily Cash can also be used to make a payment to the user's Apple Card balance. Beyond just serving as a perk, Daily Cash incentivizes the routine use of Apple Pay via Apple Card and Cash payments.

Apple has also worked to help third party developers support Apple Pay in their apps and on the web, simplifying transactions so that buyers complete the sale rather than giving up before creating an account and typing in their card number.

Cook also outlined a new program to support interest-free financing for new iPhones, while also awarding buyers with the usual 3% Daily Cashback on the purchase.

"Customers will be able to purchase their new iPhone and pay for it over 24 months with zero interest," Cook stated. "And they will continue to enjoy all the benefits of Apple Card, including 3 percent cash back on the total cost of their new iPhone with absolutely no fees and the ability to simply manage their payments right in the Apple Wallet app on iPhone."

Soli · October 31, 2019 3:26PM

I use Apple Pay within the Starbucks app to refill my Starbucks card. For me that's pretty much a 1:1 ratio on payments, save for the occasional gift card I get, but only a single transaction to reload the card to approx. 5-10 purchases via the Starbucks app.That's not likely to change, but the Starbuck's is limited to Starbucks it's odd for anyone to assume that its growth rate would be greater than Apple Pay (Samsung Pay or Android Pay) in the long run.

lkrupp · October 31, 2019 3:36PM

I have been told by clerks that only Samsung Pay works on their terminals. Turn out those terminals don’t support NFC at all but Samsung Pay works because it can mimic a card slide. That clerks and customers don't understand what’s happening or why.

Soli · October 31, 2019 3:40PM

lkrupp said:

I have been told by clerks that only Samsung Pay works on their terminals. Turn out those terminals don’t support NFC at all but Samsung Pay works because it can mimic a card slide. That clerks and customers don't understand what’s happening or why.

I'm all for ApplePay-like services to become commonplace so we can have better security and stop carrying physical cards with, but it's unfortunate that Samsung bought LoopPay. Too many people think that it's the same when it offers none of the security.

MisterKit · October 31, 2019 3:48PM

About two months ago I had a dinner at a restaurant. When the bill came I realized that it was a rare occasion where I had left my billfold with cash and credit cards at home. Fortunately I had my iPhone, the restaurant accepted Apple Pay, and I avoided a scene.

bigtds · October 31, 2019 3:56PM

I'll stick with cash and credit cards.

lordjohnwhorfin · October 31, 2019 4:05PM

bigtds said:

I'll stick with cash and credit cards.

ApplePay is more secure than a credit card and a hell of a lot more convenient.

StrangeDays · October 31, 2019 4:05PM

bigtds said:

I'll stick with cash and credit cards.

Less security, no loss recovery for cash, requires additional possession. You go with your bad self.

davgreg · October 31, 2019 4:12PM

I would love for Apple to push payments to utilities. Many use a thing called Bill Matrix and charge an outrageous fee for you to pay by credit or debit card, charging $2-3 a transaction.

bigtds · October 31, 2019 4:30PM

lordjohnwhorfin said:

bigtds said:

I'll stick with cash and credit cards.

ApplePay is more secure than a credit card and a hell of a lot more convenient.

I've never lost a dime and it's no less convenient.

Soli · October 31, 2019 4:45PM

bigtds said:

lordjohnwhorfin said:

bigtds said:

I'll stick with cash and credit cards.

ApplePay is more secure than a credit card and a hell of a lot more convenient.

I've never lost a dime and it's no less convenient.

Oh, well if you don’t think your card was ever skimmed then I’m sure that everyone who says they have, including the financial institutions that report on their losses, are all just making it up. /s

Soli · October 31, 2019 4:46PM

davgreg said:

I would love for Apple to push payments to utilities. Many use a thing called Bill Matrix and charge an outrageous fee for you to pay by credit or debit card, charging $2-3 a transaction.

That would be nice. I don’t care for using my routing and account number to save on the extra service charge.

javacowboy · October 31, 2019 4:52PM

Apple Pay still works with my first generation Apple watch. I've had problems with some readers (my inclination is to blame banks or payment processors, not Apple) but most of the time the experience is seamless.

rogifan_new · October 31, 2019 5:18PM

lordjohnwhorfin said:

bigtds said:

I'll stick with cash and credit cards.

ApplePay is more secure than a credit card and a hell of a lot more convenient.

I use Apple Pay wherever I can but I’ve never had an issue wit my credit card.

rogifan_new · October 31, 2019 5:19PM

davgreg said:

I would love for Apple to push payments to utilities. Many use a thing called Bill Matrix and charge an outrageous fee for you to pay by credit or debit card, charging $2-3 a transaction.

I have nearly all my bills on my credit card (I pay it off every month). Only two that I don’t are my electric and heating bills because they charge an extra $5 to pay by credit card.

kenc · October 31, 2019 5:34PM

Haven't carried cash in years. I actually look at the front of the store before I get out of my car, just in case there's a child raising money for some activity, then I bring my skinny wallet with a few bills in it. My iPhone has a Vena case that can hold 3 cards on the back, my ID, my health insurance, and one credit card, but I almost always use ApplePay. After a while, you just know which places take it, and subconsciously avoid those places that don't.

gatorguy · October 31, 2019 5:42PM

rogifan_new said:

lordjohnwhorfin said:

bigtds said:

I'll stick with cash and credit cards.

ApplePay is more secure than a credit card and a hell of a lot more convenient.

I use Apple Pay wherever I can but I’ve never had an issue wit my credit card.

In the 45+ years I've used credit cards I don't ever recall losing even a penny to fraud on one.

Now has my card provider? Most likely. My AMEX has been replaced at least three times I can recall due to some online compromised transaction (not ever from a brick and mortar at least yet) but even if the provider never saw a loss do you think their rates charged to you would be any less? Extremely doubtful. They might get a bit richer, maybe or maybe not even give bigger executive bonuses, but the savings won't be passed on to you.

These "secure payment" systems aren't primarily designed to benefit the consumer AFAICT. Anything in that regard is simply a byproduct.

EsquireCats · October 31, 2019 5:49PM

This is only a good thing. PayPal is unaccountable b/s. Literally a bank that isn’t beholden to banking regulation and frequently freezing funds away from their rightful holders.

Soli · October 31, 2019 5:50PM

gatorguy said:

rogifan_new said:

lordjohnwhorfin said:

bigtds said:

I'll stick with cash and credit cards.

ApplePay is more secure than a credit card and a hell of a lot more convenient.

I use Apple Pay wherever I can but I’ve never had an issue wit my credit card.

In the 45+ years I've used credit cards I don't ever recall losing even a penny to fraud on one.

Now has my card provider? Most likely. My AMEX has been replaced at least three times I can recall due to some online compromised transaction (not ever from a brick and mortar at least yet) but even if the provider never saw a loss do you think their rates charged to you would be any less? Extremely doubtful. They might get a bit richer, maybe or maybe not even give bigger executive bonuses, but the savings won't be passed on to you.

These "secure payment" systems aren't primarily designed to benefit the consumer AFAICT. Anything in that regard is simply a byproduct.

That's not accurate You can even look at buying and trading stocks to see that modern technology has benefited the consumer. First we had low cost trades that didn't require a physical broker to make, and now free trades are commonplace You can use any number of technologies as examples, but if using an *Pay system means that theft is reduced considerably, then companies will leverage that savings to help increase consumer interest to then increase company revenue and profits.

gatorguy · October 31, 2019 5:59PM

Soli said:

gatorguy said:

rogifan_new said:

lordjohnwhorfin said:

bigtds said:

I'll stick with cash and credit cards.

ApplePay is more secure than a credit card and a hell of a lot more convenient.

I use Apple Pay wherever I can but I’ve never had an issue wit my credit card.

In the 45+ years I've used credit cards I don't ever recall losing even a penny to fraud on one.

Now has my card provider? Most likely. My AMEX has been replaced at least three times I can recall due to some online compromised transaction (not ever from a brick and mortar at least yet) but even if the provider never saw a loss do you think their rates charged to you would be any less? Extremely doubtful. They might get a bit richer, maybe or maybe not even give bigger executive bonuses, but the savings won't be passed on to you.

These "secure payment" systems aren't primarily designed to benefit the consumer AFAICT. Anything in that regard is simply a byproduct.

That's not accurate You can even look at buying and trading stocks to see that modern technology has benefited the consumer. First we had low cost trades that didn't require a physical broker to make, and now free trades are commonplace You can use any number of technologies as examples, but if using an *Pay system means that theft is reduced considerably, then companies will leverage that savings to help increase consumer interest to then increase company revenue and profits.

So have the CC providers lowered any of your rates because you use Apple Pay? You're saving them money so they should. All the "secure payment' systems including Apple's are based on a Mastercard/Visa effort and process design intended to deliver savings to the member banks, not the consumer.

Companies will nearly always attempt to maximize profits, and only when nudged or prodded by competitors "pass some of the savings on to you".

Soli · October 31, 2019 6:03PM

gatorguy said:

Soli said:

gatorguy said:

rogifan_new said:

lordjohnwhorfin said:

bigtds said:

I'll stick with cash and credit cards.

ApplePay is more secure than a credit card and a hell of a lot more convenient.

I use Apple Pay wherever I can but I’ve never had an issue wit my credit card.

In the 45+ years I've used credit cards I don't ever recall losing even a penny to fraud on one.

Now has my card provider? Most likely. My AMEX has been replaced at least three times I can recall due to some online compromised transaction (not ever from a brick and mortar at least yet) but even if the provider never saw a loss do you think their rates charged to you would be any less? Extremely doubtful. They might get a bit richer, maybe or maybe not even give bigger executive bonuses, but the savings won't be passed on to you.

These "secure payment" systems aren't primarily designed to benefit the consumer AFAICT. Anything in that regard is simply a byproduct.

That's not accurate You can even look at buying and trading stocks to see that modern technology has benefited the consumer. First we had low cost trades that didn't require a physical broker to make, and now free trades are commonplace You can use any number of technologies as examples, but if using an *Pay system means that theft is reduced considerably, then companies will leverage that savings to help increase consumer interest to then increase company revenue and profits.

So have the CC providers lowered any of your rates because you use Apple Pay? You're saving them money so they should.

Companies will nearly always attempt to maximize profits, and only when nudged or prodded by competitors "pass some of the savings on to you".

Yes! The Apple Card directly rewards users with additional cash back for using Apple Pay.

Then there will be benefits you’re not seeing like newer card offerings being more competitive with interest rates or offering additional services because loss from theft is decreasing, but chances are we’re not at a threshold to where that’s moving the needle enough to make a difference with all their transactions.

Editorial: Apple Pay passes PayPal, tramples Google Pay & Samsung Pay

Even fake data couldn't keep Apple Pay down

Apple Card pays you to use card for Apple Pay

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