Apple’s mobile wallet is gobbling up a growing chunk of card payments around the world. As the service grows, it’s becoming a greater challenge to rivals like PayPal and attracting the attention of competition watchdogs.
Apple Pay accounts for about 5% of global card transactions and is on pace to handle 1-in-10 such payments by 2025, according to recent trend data compiled by Bernstein, a research firm. “There are indeed plenty of reasons to worry that Apple may attempt to disrupt the payments ecosystem,” Bernstein analysts, led by Harshita Rawat, wrote in a research note.
As iPhone sales plateau, the Cupertino-based company is leaning into its services division, which includes Apple Pay. The unit generated $12.7 billion in revenue in the last three months of 2019, a 17% increase from a year earlier. The company’s payments ambitions have the benefit of a massive cash hoard, years of experience in card transactions, and a vast customer base consisting of hundreds of millions of iPhone users.
The digital payments race is an immense opportunity, representing about $1 trillion in revenue around world. Visa and MasterCard process more than $14 trillion of payments each year and are still growing as more transactions go online, flow through apps, and as consumers in many parts of the world use cash less often.
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