October 20, 2022

Apple Pay Surpasses Mastercard in Dollar Transactions

The latest research has indicated that Apple Pay, the mobile payment service launched by Apple Inc in 2014, has overtaken Mastercard in the dollar value of annual transactions. In terms of popularity, Apple Pay is now in second place behind Visa. However, with transactions worth $6 trillion a year, Apple Pay has some way to go to challenge the hegemony of Visa, which processes a total of $10 trillion in transactions annually.

The growing popularity of mobile purchases

Apple Pay is clearly benefiting from the boom in mobile purchases, with the majority of global consumers using mobile phones to purchase goods and services. The use of Apple Pay in the United Kingdom is widespread, and in terms of market penetration, the payment method is ahead of the United States. However, one reason for this is the lack of mobile payment options available in the UK, whereas Apple Pay faces tougher market conditions with the existence of providers such as Venmo and Zelle operating in the US.

Another possible reason for the increase in the use of Apple Pay is its usability and convenience. It works without physical cards and can be used in physical shops as well as online operations and is already built into Apple devices such as iPhones, Apple Watches, Mac computers, and iPads.

Another benefit is that Apple Pay uses the in-built protection of iPhones, which adds an extra layer of security. In addition, when purchases are made using Apple Pay, a device-specific number and a unique transaction code are used. This means credit or debit card numbers are not stored on the device. A further layer of privacy is that transaction information created when using Apple Pay is not stored by the payment methods.

Nevertheless, in some age groups, other payment methods remain more popular than Apple Pay. With just 11% of the over 65 age group registered mobile payment users, this means that payments such as direct debits for utility bills and council tax, which are usually set up and left to run for many decades, are more popular than Apple Pay.

The popularity of Apple Pay has led to its inclusion in areas where debit cards are still dominant. In the online casino industry, Apple Pay is currently only available as a payment option for 70% of casinos. Amongst the popular casino deposit methods, debit cards remain the most popular, with universal coverage as a payment option. While being a highly popular retail payment option, PayPal is making slow gains and is currently available at just 60% of casinos.

Moving into the future

Apple Pay, along with its rivals PayPal and Google Pay, also facilitates the purchase of cryptocurrency, creating a further area of development that is growing in popularity. Coupled with the increased ownership of smartphones which allow payments via iOS and Android phones, this is likely to contribute to further growth.

In the future, there is also likely to be a further rise in the use of Apple Pay, both online and offline, with 60% of UK residents using the payment system in a shop or restaurant in the year from August 2020 to August 2021. Indeed, Apple is not standing still when it comes to investing in new financial products. The extent of the company’s ambitions is exemplified by its partnership with the multinational investment bank Goldman Sachs, which will result in Apple offering a high-yield savings account to its users.

Apple Pay is also eager to muscle its way into the lucrative buy now, pay later market, with Apple Pay Later planned to enter the UK market following a successful launch in the United States.

As the number of smartphone users increases, this provides a huge opportunity for growth for payment methods such as Apple Pay. This is likely to continue with the largest percentage of mobile payment users in the much-coveted 18-36 age group.

About the author 

Kyrie Mattos

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