Apple Pay usage continues to grow, thanks to expanded retailer support and availability inside of apps. Now, a new research note claims the contactless payments solution is one of the biggest long-term threats to PayPal.
Quartz reports Bernstein researchers estimate that Apple Pay currently accounts for approximately 5% of global card transactions. It could account for as much as 10% by 2025. That continued growth could be at the expense of PayPal.
Apple’s Services division, which includes Apple Pay, generated $12.7 in revenue in the last calendar quarter of 2019. That’s a 17% increase from a year earlier.
There is tremendous opportunity in the digital payments arena, as Visa and Mastercard process over $14 trillion of payments each year, and still growing. As more transactions go online, are performed inside apps, and pay with cash less often, the opportunity continues to grow.
Apple’s comparison to PayPal is one that Apple has highlighted recently. Last year, Apple CEO Tim Cook boasted that Apple Pay transaction volume is growing 4x as fast as PayPal, New user growth is also outpacing the venerable electronic payments service.
As pointed out by quartz, Apple benefits from the tight hold it has on its iPhone’s NFC hardware, which has prompted some regulatory agencies to take a closer look at Apple’s behavior. For example, European Union regulators have recently investigated Apple’s potentially anticompetitive behavior in the payments industry.
In a separate report also published today, Juniper Research estimated that Apple Pay could be a driving force behind contactless payments reaching $6 trillion globally by 2024.