{"id":60435,"date":"2023-09-13T10:16:34","date_gmt":"2023-09-13T14:16:34","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/the-iphones-secret-weapon-apple-pay\/"},"modified":"2023-09-13T10:16:37","modified_gmt":"2023-09-13T14:16:37","slug":"the-iphones-secret-weapon-apple-pay","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=60435","title":{"rendered":"The iPhone&#8217;s Secret Weapon: Apple Pay"},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-BAR-0000742523\">\n<div data-layout=\"wrap\n              \" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetMediaIllustration\n          wrap\n  article__inset\n        article__inset--type-InsetMediaIllustration\n          article__inset--wrap\n    article__inset--lead\n  \"><\/p>\n<p>        <!-- eventually when we know what this card will be we can change it and leave this one --><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-wrap\n        article__inset__image\n      \" itemscope=\"\" itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<div style=\"padding-bottom:66.66666666666666%;\" data-subtype=\"photo\" class=\"image-container  responsive-media article__inset__image__image\"><\/div>\n<\/figure><\/div>\n<p>\n        Apple<br \/>\n       annual iPhone upgrades, launched Tuesday, promise an array of hardware and software goodies in new models. <\/p>\n<p>Left unsaid in the company\u2019s presentation was that<br \/>\n        Apple<br \/>\n       (ticker: AAPL) has been quietly growing into a\u00a0 \u201cfintech\u201d giant with its Apple Pay digital wallet\u2014posing more competition to rivals in payments while keeping\u00a0 iPhone users in the Apple ecosystem and additional reasons to keep buying new models.<\/p>\n<div class=\"paywall\">\n<p>Apple Pay launched in 2014 but has only taken off in recent years. Apple Pay is a digital wallet that can store credit cards and Apple\u2019s own card, co-branded with<br \/>\n        Goldman Sachs<br \/>\n       (GS). IPhone users can pay for items in stores through contactless terminals or use Apple Pay online.  <\/p>\n<p>Apple Pay processed $600 billion to $700 billion in payments in 2022, estimates MoffettNathanson analyst Lisa Ellis. It\u2019s also gaining market share in online \u201cbranded\u201d checkout (seeing Apple Pay as an option for a payment), she wrote in a note on Tuesday.<\/p>\n<p>Apple Cash\u2014a P2P platform and cash back service\u2014hasn\u2019t been so successful, she writes, and its Apple Card has been only a modest hit with 7.5 million users.<\/p>\n<p>Apple is hardly sitting still in payments and other areas of fintech. It launched a high-yield savings account in April, also with<br \/>\n        Goldman Sachs<span>,<\/span><br \/>\n       and that now has more than $10 billion in deposits, offering yields of 4.2%, Apple said in August.<\/p>\n<p>None of this may move the needle on Apple\u2019s revenue base, estimated at $389 billion this year, according to consensus forecasts. But it gives iPhone users another reason to stick with the device and upgrade to new models out of sheer convenience.  <\/p>\n<p>It also spells trouble for incumbents in the payments space. Apple\u2019s ever-increasing number of financial products, including Apple Pay Later and Apple Cash are housed on the number one mobile-device operating system in the U.S. <\/p>\n<p>While iPhone users can download apps such<br \/>\n        PayPal<br \/>\n       and Venmo, offered by<br \/>\n        PayPal Holdings<br \/>\n       (PYPL), and Cash App, from<br \/>\n        Block<br \/>\n       (SQ), the level of ease of using an Apple app on Apple hardware could be more glue for Apple and less stickiness for rivals.  <\/p>\n<p>\u201cApple has emerged as the most formidable Big Tech player in Payments, due to its scale, commitment, resources, and affluence of its user base,\u201d Ellis said in her note.  <\/p>\n<p>Apple did not immediately respond to a request for comment.<\/p>\n<p>Among payments companies, Apple\u2019s dominance is \u201cmost directly negative\u201d for PayPal, Ellis wrote. The two compete most on PayPal\u2019s \u201cbranded\u201d checkout button as Apple Pay becomes increasingly available. Meanwhile, PayPal has only seen mid-single digit growth in its branded checkout button over the last three quarters.<\/p>\n<p>Ellis sees Block facing a \u201cmodest negative\u201d from Apple as the two compete most directly on buy now, pay later offerings with Block having Afterpay and Apple having Apple Pay Later. <\/p>\n<p>PayPal and Block did not immediately respond to requests for comment.<\/p>\n<p>Similarly,<br \/>\n        Affirm Holdings<br \/>\n       (AFRM), another player in the \u201cbuy now, pay later\u201d space, is expected to only experience \u201cmodest negative\u201d pressure from Apple so long as Apple focuses on \u2018pay-in-4\u2019 loans. While Affirm\u2019s pay-in-4 product attracts a lot of attention, its longer-duration loans account for three quarters of its gross merchandise volume.<\/p>\n<p>Legacy payments companies face less of a threat from Apple, Ellis writes.<\/p>\n<p>\n        Visa<br \/>\n       (V) and<br \/>\n        Mastercard<br \/>\n       (MA) face \u201clow\u201d threats as Apple still uses the card networks for payment authorization, clearing and settlement. While the two should be aware of Apple\u2019s growing influence in financial services, she believes the relationship will \u201cremain positive and mutually beneficial.\u201d\u00a0<\/p>\n<p>\n        American Express<br \/>\n       (AXP) could benefit from Apple as Ellis sees opportunities for the two to collaborate on an overlapping, high-end client base. She also sees the possibility of Amex replacing Goldman Sachs (GS) as Apple\u2019s bank partner, which would be a \u201cpowerhouse combination.\u201d<\/p>\n<p>Goldman Sachs and American Express did not immediately respond for a request for comment.<\/p>\n<p>Given the pressures, investors appear to have soured on payment stocks, while giving Apple some credit for its fintech growth. While Apple\u2019s stock has retreated lately, it is still up 35% this year. PayPal is down 11.8% and Block is off 13.5%. <\/p>\n<p>Write to Carleton English at carleton.english@dowjones.com<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/articles\/apple-paypal-block-payments-d5001b5a?mod=investing\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Apple annual iPhone upgrades, launched Tuesday, promise an array of hardware and software goodies in new models. Left unsaid in the company\u2019s presentation was that Apple (ticker: AAPL) has been quietly growing into a\u00a0 \u201cfintech\u201d giant with its Apple Pay digital wallet\u2014posing more competition to rivals in payments while keeping\u00a0 iPhone users in the Apple [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":60436,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-60435","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The iPhone&#039;s Secret Weapon: Apple Pay | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Apple annual iPhone upgrades, launched Tuesday, promise an array of hardware and software goodies in new models. 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