Apple Pay could make up around 10% of all card transactions by 2025, according to data.
Quartz has suggested that Apple’s NFC payments platform could become a serious rival to established giants like PayPal, as consumers opt for Apple Pay when they’re shopping.
At present, Apple Pay accounts for around 5% of all transactions around the world, but if the growth trend continues, then it could double its reach and usage within the next five years.
Should that be the case, Apple would directly compete with the likes of PayPal and Visa and MasterCard, which could prompt the company to set up its own payments network away from existing card manufacturers.
As it is already doing with Apple Card, the company could well dominate the card payments and banking industry with the right innovation and strategy.
“Apple Pay probably won’t pose a challenge to the card giants anytime soon,” the report read in Quartz.
“While the tech company could, in theory, create its own network that runs outside the card systems, Bernstein argues that Apple still needs the card networks, which are ubiquitous and trusted.”
“Visa and MasterCard, meanwhile, are used to dealing with partners (traditionally large card-issuing banks) with the kind of scale that even Apple Pay could muster.”
“For now, PayPal has a commanding lead in the world of online checkouts, and also benefits from network effects that have been building up since the turn of the century. But Apple and PayPal could end up competing for the same turf in the coming years.”
One of the biggest advantages of Apple Pay is that it comes as part of the Wallet app, which is installed on every iPhone sold around the world.
What’s more, the company has tight control over the technology used inside, meaning payment competitors cannot offer Apple Pay-like services on iOS devices without overcoming the barriers Apple puts in its way.
The company is facing an uphill battle, however. Many institutions around the world are trying to open up the NFC technology in iPhones to allow other providers to better compete.
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