Apple’s own NFC-enabled payment product isn’t yet available to consumers, as it will be enabled later in October on the iPhone 6 and iPhone 6 Plus following an iOS 8 update, but it’s already seen as the “player to beat,” by Morgan Stanley. Previously, Microsoft’s Bill Gates also praised Apple’s contactless payments initiative.
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“By reducing fraud, improving data security, and increasing credit/debit volumes for issuers and networks, while protecting the value of the existing payments value chain, we believe Apple Pay has a high chance of success,” Morgan Stanley analyst Craig Hettenbach said in a note to investors seen by AppleInsider. “Apple’s market share in the U.S., its exposure to a relatively affluent demographic, and the ease of use along with a unique form factor (Apple Watch) position Apple Pay as the player to beat in the mobile wallet space.”
“Most other players looking to launch mobile wallets have either struggled with making the package sufficiently cost effective/attractive for merchants (PayPal, Square, Google Wallet) or sufficiently intuitive and convenient for the consumer (Isis/SoftCard, other telco wallets),” he added. “We think Apple may have solved both problems in one application.”
Previous reports have indicated that banks were eager to partner up with Apple for Apple Pay, accepting the conditions Apple asked for, and thus making sure they’re on board from the get-go rather than being left outside. PayPal, on the other hand, missed out on the Apple Pay deal even though it negotiated with Apple early during development, after also inking a payments partnership with Samsung.
The fact that Apple Pay uses a preexisting payment infrastructure and NFC technology is seen as another factor that will lead to its success, and with it, to the increase in popularity of contactless payment options.
The analyst also said he expects 50% of payment terminals to be compatible with NFC-based payment options by October 2015.
Apple Pay will also be available next year on certain older iOS devices when connected to an Apple Watch, but also on future next-gen iPads.