1. Market Research
  2. > Financial Services
  3. > Banking
  4. > Payments Market Trends

Insight Report: The Future of Apple Pay

  • February 2015
  • 33 pages
  • GlobalData
Report ID: 2670525

Summary

Table of Contents

Synopsis
Apple Pay is a major milestone in the evolution of mobile payments, partly as it bears what Forbes lists as the world’s most valuable brand. Apple Pay is seen by many as an inflection point, and its development over the next three to five years has the potential to shape the payments industry for decades to come. According to Apple CEO Tim Cook, Apple only ventures into areas where it can control the primary technology, which perhaps hints at Apple’s plans in the payment industry.

Apple’s current business model follows a cooperative approach, with almost all major card networks, issuers and acquirers supporting the launch of Apple Pay. EMV migration in the US plays a pivotal role in Apple Pay’s adoption. Merchants are in the process of upgrading their POS terminals to EMV, which in most cases will also comprise NFC hardware (NFC-capable terminals). These terminals only require a simple software upgrade to be activated (NFC-enabled terminals). POS vendors and acquirers are expected to offer bundled deals for merchants to simultaneously upgrade their terminals to EMV and NFC, resulting in an accelerated expansion of NFC acceptance.

However, Apple could face a challenge in terms of allocation of merchant service charges with other payment participants, especially as regulators across the world cap interchange fees. Timetric’s primary research has identified different points of view regarding the expansion of Apple Pay beyond the US. Some industry experts argue that low interchange fees outside the US, especially in Europe, will discourage Apple from entering these markets, while others stress that Apple is not expecting substantial profits from Apple Pay; the solution is mainly intended to decrease the commoditization of Apple’s products.

Summary
The report provides insights into Apple’s mobile payment solution, Apple Pay:

- It analyzes factors contributing to adoption of Apple Pay along with challenges.

- It analyzes Apple Pay’s impact on payment security.

- It explores whether merchants and consumers are ready to accept Apple Pay.

- It outlines its potential impact on key market participants and competitors.

- It explores whether Apple Pay is a game changer for mobile payments and NFC.

Scope
- This report covers the competitive landscape for Apple Pay.

- It provides a comparative analysis of hardware-based secure element vs cloud-based host card emulation technology.

- It discusses impact of Apple Pay on key card schemes, issuers, POS vendors, merchant acquirers, mobile network operators and smartphone manufacturers.

- It analyzes the impact of EMV migration in the US.

Reasons To Buy
- Gain understanding of innovation and the changing landscape in the global payments market. Is Apple Pay likely to become a mainstream payment solution in North America?

- Understand how will Apple Pay affect consumer payments in Europe and the rest of the world.

- Gain insights into competitive threats and opportunities from emerging, new and potentially significant operators in the global payments market.

- Gain an insight into the winners and losers in the new environment.

- Understand how Apple Pay will affect payment technology requirements, industry standards, security and the overall payments ecosystem.

Key Highlights
- Apple Pay has attracted the interest of the payments industry and the public in mobile payments and NFC technology. Although it has not introduced a genuinely new technology, it has been successful in combining existing technology such as Secure Element (SE), tokens and biometric authentication to develop a new payment solution. From a marketing and distribution perspective, Apple Pay benefits greatly from Apple’s brand and technology platform.

- Card transactions processed through Apple Pay are expected to be less prone to fraudulent activity than mag-stripe and EMV cards, as Apple Pay combines tokenization, chip, dynamic authorization codes, and biometric authentication. Banks in the US have rallied to support Apple Pay, partly because of its security features. However, whether or not Apple Pay can significantly reduce fraud levels in card transactions outside the US remains uncertain, due largely to the limited reach of iOS.

- The mobile payment ecosystem remains highly fragmented, with various new entrants making inroads into the market, but only a few operators a position to compete internationally. The introduction of Apple Pay is expected to lead NFC-based contactless payments to gradually polarize into iOS and Android-based solutions, with a limited number of service providers dominating the market.

- While various sources suggest that Apple Pay is preparing for an international service rollout in 2015, the mobile payments environment outside North America, and in particularly in Europe, is considerably different from that in the US, in particular in terms of interchange and NFC acceptance. Key challenges for Apple Pay in Europe includes the EU’s mounting pressure on interchange fees and different fraud dynamics of the US and Europe.

- Field trials indicate that making payments through Apple Pay adds value to the consumer in the form of convenience. However, mobile payments will need to overcome consumer habits of using plastic cards and cash. Encouraging consumers to change old habits requires time and extensive consumer education, irrespective of the benefits the new technology has to offer. Apple may need to increase incentives for Apple Pay adoptions beyond the convenience offered by the system.

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 60 Million searchable statistics with tables, figures & datasets
  • More than 25,000 trusted sources
  • Single User License — provides access to the report by one individual.
  • Department License — allows you to share the report with up to 5 users
  • Site License — allows the report to be shared amongst all employees in a defined country
  • Corporate License — allows for complete access, globally.

Ahmad helps you find the right report:

Testimonials

The research specialist advised us on the best content for our needs and provided a great report and follow-up, thanks very much we shall look at ReportLinker in the future.

Kate Merrick

Global Marketing Manager at
Eurotherm by Schneider Electric

We were impressed with the support that ReportLinker’s research specialists’ team provided. The report we purchased was useful and provided exactly what we want.

Category Manager at
Ikea

ReportLinker gave access to reliable and useful data while avoiding dispersing resources and spending too much time on unnecessary research.

Executive Director at
PwC Advisory

The customer service was fast, responsive, and 100% professional in all my dealings (...) If we have more research needs, I'll certainly prioritize working with ReportLinker!

Scott Griffith

Vice President Marketing at
Maurice Sporting Goods

The research specialist provided prompt, helpful instructions for accessing ReportLinker's product. He also followed up to make sure everything went smoothly and to ensure an easy transition to the next stage of my research

Jessica P Huffman

Research Associate at
American Transportation Research Institute

Excellent customer service. Very responsive and fast.

Director, Corporate Strategy at
Ingredion

I reached out to ReportLinker for a detailed market study on the Air Treatment industry. The quality of the report, the research specialist’s willingness to solve my queries exceeded my expectations. I would definitely recommend ReportLinker for in-depth industry information.

Mariana Mendoza

Global Platform Senior Manager at
Whirlpool Corporation

Thanks! I like what you've provided and will certainly come back if I need to do further research works.

Bee Hin Png

CEO at
LDR Pte Ltd

The research specialist advised us on the best content for our needs and provided a great report and follow-up, thanks very much we shall look at ReportLinker in the future.

Kate Merrick

Global Marketing Manager at
Eurotherm by Schneider Electric

Purchase Reports From Reputable Market Research Publishers

Tokenization Market by Solution, Service, Application Area, Deployment Mode, Organization Size, Vertical, and Region - Global Forecast to 2022

  • $ 5650
  • Industry report
  • May 2017
  • by MarketsandMarkets

The growing concern over increased credit and debit card frauds is driving the tokenization market The tokenization market size is expected to grow from USD 823.0 million in 2017 to USD 2,258.6 million ...

Global Market Study on Mobile Ticketing: Travel Tickets Application Segment Projected to be the most Attractive Segment During the Forecast Period

  • $ 4900
  • Industry report
  • April 2017
  • by Persistence Market Research

Persistence Market Research presents a comprehensive analysis of the global mobile ticketing market in its new publication titled ‘Mobile Ticketing Market: Global Industry Analysis and Forecast, 2016–2024’. ...

Global Market Study on Consumer Mobile Payments: Retail End Use Industry Segment Anticipated to Create High Absolute $ Opportunity During 2016 - 2026

  • $ 4900
  • Industry report
  • April 2017
  • by Persistence Market Research

Persistence Market Research in its report ‘Consumer Mobile Payments Market: Global Industry Analysis and Forecast, 2016 - 2026’, has conducted a comprehensive study of the global consumer mobile payments ...


ref:plp2015

Reportlinker.com © Copyright 2017. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.