Apple Inc. AAPL is reportedly gearing up to expand its mobile payment service, Apple Pay, beyond the app. Media reports suggest that the company has been working on the integration of Apple Pay with its Safari browser.
With this move, users with TouchID sensor integrated iPhones and iPads will be able to make transactions via Apple Pay’s mobile site on Safari. Reportedly, the company is planning to roll out the service for desktop users as well.
It is expected that the mobile version of Apple Pay will be released before the end of this year in time to tap the holiday spending splurge.
This expansion is likely to make the transaction cycle much smoother for users as it would eliminate the need to install the app on each device. In addition, it would significantly boost the company’s market share and offer an edge amid stiff competition from players like PayPal PYPL, Samsung Pay, Alphabet’s GOOGL Google Wallet and Amazon’s AMZN Amazon Payments.
In Sep 2014, Apple launched the payment service in the U.S. in partnership with global card processing giants – Visa and MasterCard. The service has now been expanded to the U.K., Australia, Canada and China and is expected to reach Spain, Singapore and Hong Kong by the end of fiscal 2016.
This contactless payment service has gained a lot of traction over the past year, being hassle-free yet secure. Notably, Apple Pay’s growth has been 10 times more in the second half of 2015 than the first. Per an Accenture report, approximately 68% of in-store mobile phone payments in the U.S. were done through Apple Pay in 2015.
According to a report by Taiwan-based TrendForce, total mobile payment volume is expected to be $620 billion in 2016 and touch the $1 trillion mark by 2019.
In view of such statistics, the company’s strategy to expand Apple Pay through all possible means (international, platform and device expansion) appears beneficial. Earlier, there were rumors that the iPhone maker was testing person-to-person payments and card-less ATM withdrawals to broaden its payment services.
We believe that these initiatives, along with Apple’s reputation to offer cutting-edge technology and value addition for customers, are placing it well to gain from the rapidly growing mobile payments market.
And not to forget, as Apple Pay strengthens the ecosystem, demand for Apple devices also get a boost.
At present, Apple has a Zacks Rank #3 (Hold).
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