Apple Pay will be responsible for 1-in-10 global card transactions by 2025

Apple Pay will be responsible for 1-in-10 global card transactions by 2025 worth trillions of dollars a year and even rival PayPal for online payments.

The mobile wallet currently accounts for about 5 per cent of all global card transactions, according to research by market analysts Bernstein.

With a network of millions of iPhone users and the ability to use the wallet to pay online or in stores, Bernstein says Apple is on track to dominate the market.

This raises anti-trust concerns and could see regulators investigate the Apple Pay service more closely as it grows in popularity, a Quartz article reports. 

The European Commission is currently investigating Apple’s control over the iPhone’s near field communication tech that allows the phone to make contactless payments – it is only available for use by Apple’s own software. 

The Apple Card is a credit card linked to the Apple Pay wallet. The mobile wallet currently accounts for about 5 per cent of all global card transactions, according to research by market analysts Bernstein

There is a lot at stake, the digital payments industry took an estimated trillion dollars in revenue worldwide last year (£770 billion), according to Bernstein.  

Visa and MasterCard handle more than $14 trillion in payments annually and as online and apps grow, people are using less cash and card more often.

Bernstein, in a research note, suggest that Apple could even launch its own payment network in future to rival Visa and MasterCard, rather than operate through them. 

“There are indeed plenty of reasons to worry that Apple may attempt to disrupt the payments ecosystem,” said Bernstein analyst, Harshita Rawat.

Apple makes money from its payment wallet by taking a tiny fraction of every transaction made using an iPhone, iPad or Apple Watch. 

The wallet can be used to make a contactless payment in a shop, on public transport, in an app or through an online store.

There are a number of other wallet apps including PayPal, Google Pay and the Chinese Alipay but they can’t make use of a key technology used by Apple Pay. 

Apple has come under fire from other companies which claim it is restricting competition by only allowing its own wallet to use near field communication (NFC) on its devices but not other wallets.

The company says this is done to protect devices and information from hackers, rather than to restrict competition.

Apple Pay has been rolled out to a number of transport services, including in London where you can pre-approve its use without having to authenticate with a pass code or FaceID

PayPal is the global leader in online checkouts, with many apps and services offering an option to pay using the 22 year old service.

Bernstein claims Apple is already available as a checkout option through a number of websites and could overtake PayPal in future if it continues its pace of growth.

Apple Pay launched in 2014 and allows people to ‘virtually store’ their credit and debit cards then use their phone to make purchases on and offline. 

The company has also launched a credit card linked to its wallet and the ability to send virtual cash payments to other Apple Pay users. 

Another report suggested that by 2024 Apple Pay will account for more than half of all transactions made on devices using an app like Apple Pay or Google Pay. 

The app report by Juniper Research said Apple Pay would account for 52 per cent of that type of transaction by 2024, up from 43 per cent today. 

They say this will be in part due to rising numbers of users in Europe and China, new markets and the physical Apple credit card that is linked to Apple Pay. 

HOW DOES APPLE PAY WORK?

Apple Pay is the firm’s mobile payment and virtual wallet service.

It allows customers to make payments using an iPhone, Watch, iPad or Mac. 

It works alongside most banks and most major credit and debit cards providers including Visa, MasterCard and American Express.

To use the services, users must link their device, security details and bank card.

To do this, open Wallet, go to settings and find Wallet and Apple Pay in there.

Apple Pay is the Apple’s mobile payment and virtual wallet service. It allows customers to make payments using an iPhone, Watch, iPad or Mac

Here, you can add credit or debit cards.

Before it is activated, the device needs to be authenticated by the bank.

Each bank has different protocols, but their security measures will have to be passed before Apple Pay is fully verified.   

After your card is verified, you can tap Next and start using Apple Pay.

Apple Pay requires the Near Field Communication (NFC) antenna and Touch ID or Face ID on iPhone 6 and later to work. 

Once set up, you can hold your device near a contactless terminal to authorise a payment.

For most iPhones double pressing the home button will bring up the Apple Pay function, which will use your fingerprint to confirm the transaction. 

On the iPhoneX, users must press the sleep/wake button twice to invoke Apple Pay.