In December 2018 on the earnings call for Apple, analysts were given several incremental data points on the usage of Apple Pay. It may seem like an insignificant piece of the ecosystem, as it only represents a fraction of a percent of overall revenue, but it serves as a great example of what you can build with integrated hardware/software and a reputation of protecting user privacy.
Apple Pay adoption, according to Loup Ventures, continues to climb (launched in 2014), but more importantly, it represents another sticky feature that makes users more likely to remain loyal to Apple products.
Apple Pay Adoption Estimates
- The iPhone installed base, on which a rare update was given, now stands at 900 million devices.
- It is estimated, based on survey work as well as the growth in transactions, countries, locations, and banks, that 43% of global iPhone users have enabled Apple Pay. This is up from 36% in September 2018 and 20% in December 2017. That implies there are currently 383 million Apple Pay users, up 21% sequentially and 135% year on year. This growth is fuelled in part by the launch of P2P payments in January 2018.
- It is also estimated, based on the number of active countries and number of use cases within those markets, that 12% of Apple Pay users are in the US, and 88% of users are international. For reference, 21% of active iPhones are in the US.
- This means that utilisation of Apple Pay in the US is lower than other countries. One factor is greater acceptance on public transportation in China, Japan, UK, and Russia. It is estimated that 24% of US iPhone users have used Apple Pay vs. 47% of international users.
- Tim Cook also mentioned that transactions topped 1.8 billion during the December 2018 quarter, more than doubling the volume a year ago. This is a step down from 300% year on year growth in September 2018. While a decline in growth rate, it still represents an impressive ramp in usage.
- Three new countries were added during the December 2018 quarter (Germany, Belgium, and Kazakhstan), bringing yearly additions to seven and total countries to 27.
Although just under half (43%) of global iPhone owners use Apple Pay, that number will continue to grow as more retailers, universities, municipalities, and public transportation systems enable contactless payments and people begin to think of their phone as their wallet.
While Apple Pay likely won’t have a measurable impact on Services revenue growth, the model, enabled by Apple’s treatment of user privacy, lays the groundwork for handling other sensitive data and bringing ease of use to areas like healthcare.
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