Apple Pay finally launched in the UK this week after a successful roll-out across the United States.
Apple Pay is designed to shake up the mobile payments market and, as Apple’s iPhone has a 20% share of the global smartphone market, there’s a real chance that the company could soon dominate the mobile payments world.
Apple’s mobile payment system uses a near-field communications, which allows you to link payment cards to your iPhone, iPad or Apple Watch and pay for items in stores.
It’s clear that Apple Pay could be A threat to competitors like Monitise (LSE: MONI), Paypoint (LSE: PAY) and Optimal Payments (LSE: OPAY). Apple already has the infrastructure in place to connect customers with banks and other payment networks. Indeed, within weeks of launching in the US, Apple Pay had grabbed a 2% share of the US mobile payments market, that’s around $1bn worth of transactions per annum.
Working with developers
Optimal Payments has tried to capitalise on the success of Apple Pay by launching its own iOS software development kit for Apple’s payment system. The software allows allowing developers, merchants and partners to add Apple Pay In-App Purchase as an accepted payment option on Optimal’s own payment system. If everything goes to plan, Optimal’s decision to incorporate Apple into its own network should help it piggyback off Apple Pay’s growth.
Monitise is also looking to piggyback off Apple Pay’s growth. The company plans to help its key bank clients and Apple co-operate. In a statement released this week, Monitise shed some light on the issue:
“As Apple Pay opens its APIs we can enable our banking clients’ payment scheme and private label cards into the Apple Wallet just as we support them in all of their mobile banking needs today using our secure API-based cloud platform. Via the app design and build services we offer from our Monitise Create division, we can help retailers with in-app purchases.“
Lack of options
Paypoint is looking on Apple Pay’s lack of payment options. Specifically, Paypoint is the UK’s leading payment collection network used mostly for the cash payment of bills and services. The company bridges the gap between cash and non-cash payments, which means that the company is in a unique position. As Dan Salmons, managing director at PayPoint Mobile and Online, has put it, the success of mobile payments relies on maintaining an element of choice for the consumer.
Apple Pay may offer a sleek, seamless way to pay, but for those without a smartphone or bank account that’s compatible with the service, other cashless payment options remain the better choice.
The bottom line
Overall, Apple Pay is broadly good news for Optimal, Paypoint and Monitise. It’s widely believed that service will increase the take-up of mobile payment solutions among consumers, which is great news for the industry in general.
Monitise and Optimal are looking to benefit from this growth by integrating their systems with Apple Pay. On the other hand, Paypoint has its own niche in the market, which is unlikely to be impacted by Apple’s new service.
