What it is: Apple Pay is a way to link your credit card to your iPhone, iPad, or Apple Watch to securely pay without revealing your credit card information to the vendor.
While everyone focuses on Apple as being an iPhone company, most people overlook the future revenue represented by Apple Pay. There’s a reason why credit card companies like MasterCard and VISA are so rich and powerful. When you can take a small percentage of every transaction, you can make millions of dollars every second as people buy around the world.
That’s what Apple Pay represents. Not only is Apple Pay more secure than credit cards because it shields the credit card information from the vendor, but it also gives apple a small percentage of every sale made through Apple Pay. This essentially turns Apple into a credit card company even though they’re working with the major credit card companies.
Now Apple has made a deal with the China UnionPay Bank, which gives Apple access to china’s huge market. Not surprisingly, other companies are trying to get into the same market as Apple Pay.
For years, Google has offered Android Pay, which never got much notice until Apple Pay came out. Then Samsung introduced Samsung Pay, which (not surprisingly) only works with Samsung smartphones. Since Samsung smartphones run Android, there’s the big question on why someone would want to use Samsung Pay over Android Pay. Samsung hopes if people choose Samsung Pay, they’ll stay loyal to Samsung smartphones. However if someone uses Android Pay, they can switch to any Android phone.
That means a certain percentage of Android users will use Android Pay and another percentage will use Samsung Pay. Samsung Pay may help keep some people loyal to Samsung, but it still won’t be as effective as Apple Pay keeping people loyal to the iPhone. With Android, you have a choice of using Android Pay or Samsung Pay. With Apple, you can only use Apple Pay.
Target is now getting into the wireless payment market and other merchants are trying to create their own wireless payment system as well. Most likely this will be as successful as Target or Walmart branded credit cards. The trouble is Target’s wireless payment system will only work with Target stores. If you shop anywhere else, you won’t be able to use Target’s wireless payment system.
That’s like having a store credit card that’s only accepted in that particular store. Some people will likely use it but many more won’t. For Target to develop their own wireless payment system may make sense in capturing a small, loyal base of customers, but it certainly won’t display Apple Pay or Android Pay.
As wireless payment systems get more popular, expect more people to use them. The leader will likely be Apple Pay followed by Android Pay. Trailing further behind will be Samsung Pay and any other wireless payment systems created by individual merchants.
Secure, wireless payment systems represent the future so it’s no surprise that so many people are jumping on Apple Pay. Eventually as more merchants accept Apple Pay, you can expect Apple Pay to provide a new source of revenue for Apple that could one day surpass the revenue from iPhone sales.