In 2022, Apple will manage an estimated US$800 billion worth of payments, making the American tech company a major fintech player globally, according to Flagship Advisory Partners, a Dutch boutique consultancy and mergers and acquisitions advisory firm. says the new report.
By 2030, that value is expected to surge to US$3.2 trillion, rising at an annual growth rate of 19% from 2022 as technology companies continue to expand their product portfolios.
Released on January 11, 2023, the new paper looks at Apple’s fintech ecosystem, delving into the company’s existing products and services, ongoing projects, and growth metrics.
Apple Pay, Apple’s mobile payment service, is currently the largest source of fintech flows for the company, with more than US$500 billion in transactions by 2022, with an estimated 30 billion transactions, according to a report. I’m here.
These metrics show that approximately 3% of all Visa and Mastercard (V/MC) consumer card value and 10-12% of V/MC card transactions in North America and Europe will be made through Apple Pay in 2022. It suggests that the
Compared to the market leader PayPal, we can see that Apple Pay has achieved impressive growth in a relatively short period of time. Apple Pay is less than half the size of PayPal in terms of flow volume, but mobile wallets have only been in operation for his eight years and PayPal for only his 24 years.
Introduced in 2014, Apple Pay is a mobile payment service that allows users to pay in person, in iOS apps, and on the web. The service is growing in popularity both at the physical point of sale (POS) and online. The company claims Apple Pay has achieved his 90% penetration rate among U.S. retailers in early 2022.
Building on this momentum, Apple introduced Tap to Pay on the iPhone in February 2022, making it even easier for merchants to adopt mobile wallets.
Tap to Pay, which allows businesses to accept Apple Pay, contactless credit and debit cards, and other digital wallets with just an iPhone and no additional hardware, already supports payment platforms Adyen, Square, and Stripe. It’s been earned and more is expected. come.
Flagship Advisory Partners is bullish on Tap to Pay growth, predicting over US$60 billion in payments via software POS by 2030.
Illustration of Apple Tap to Pay, Source: Apple
The second largest source of fintech flow after Apple Pay is payments Apple itself receives as a merchant through its own sales channels. These include the Apple Store, Apple.com, Apple Music, TV and Video Channels, and the App Store.
An estimated US$242 billion worth of transactions were reported in 2022. The App Store accounts for the majority of his US$100 billion and generates his US$25 billion in revenue for the company.
Estimated Fintech Ecosystem Volume Flows by Apple Products and Services in 2023, Source: Flagship Advisory Partners, January 2023
Expansion of consumer fintech business
Over the last few years, Apple has been getting deep into financial services, as evidenced by the company’s new product launches, the report notes.
In 2017, the company launched Apple Cash. It’s a solution that makes it easy for users in the US to send and receive money, keep their Apple Cash balances, and send money to their bank accounts.
This was followed in 2019 by the Apple Card, a credit card created by Apple and issued by Goldman Sachs. The card is primarily designed to be used with his Apple Pay on Apple devices such as iPhone, iPad, Apple Watch and Mac. Currently only available in the US, there will be 6.7 million US cardholders by early 2022.
Apple Card Dashboard, Source: Apple, January 2023
Other consumer fintech products are also in development. Apple Pay Later is a Buy Now Pay Later (BNPL) solution that allows a US user to split the cost of his purchase into four payments over his six weeks, with no interest or payments. Fees; Apple Savings Account, a “high-yield” interest-bearing savings account managed by Goldman Sachs;
Apple’s Fintech Development Timeline (2023, Selected Key Events), Source: Flagship Advisory Partners, January 2023
These developments show tech companies are working to expand their portfolios of consumer fintech products, says Flagship Advisory Partners’ report. Transaction volumes generated from Apple Card and Apple Cash will remain modest at an estimated US$30 billion worth in 2022, but that total will likely rise by 2030 as Apple continues to launch new consumer fintech products. It could rise to US$350 billion by 2020.
Looking at Apple’s fintech business model, the report notes that so far the company has invested in Goldman Sachs, JPMorgan Chase, Visa, and others to process payments and offer Apple-branded consumer fintech products. It notes that it relies on numerous partners, including Mastercard.
Despite evidence that Apple may be looking to reduce its reliance on third parties and banking partners, it is unlikely that Apple will assume all or most of the value chain roles currently offered by partners, according to Flagship Advisory. Partners said. This compares the collateral damage of becoming a fully licensed bank to working with strong partners who are offering increasingly well-designed Banking-as-a-Service (BaaS) offerings. It’s too big, the company said.
In addition to its consumer fintech line, Apple is also working to expand its digital identity offering. Apple Wallet, an app that stores users’ credit cards, debit cards, loyalty cards, loyalty cards, and credentials, is set to launch in 2022, including the launch of driver’s licenses and state identification (ID) in the app. , has undergone some development. His three US states (Arizona, Colorado, and Maryland) now offer driver’s licenses and state IDs in Apple Wallet.
Featured Image Credit: Compiled from Unsplash
