As expected, Apple Inc. on Monday announced that its Apple Pay payment system is coming to websites. The payment service will challenge Paypal Holdings Inc , which offers a mobile payment service for websites and apps called One Touch. Users will need a Mac computer, an iPhone and Safari web browser to use this new service.
How Apple Pay Will Work
Apple Pay is a simple-to-use application available on iPhone, iWatch, or iPad. It can be used to pay in stores or within apps with a fingerprint sensor. The payment system, currently available on iPhone 6/6S, iPhone 6/6S Plus, iPhone SE, iPad Pro, and the Watch, requires a fingerprint for verification. It allows iPhone users to load their credit or debit card information into the system and then tap and pay with their phone in participating stores, according to Recode.
The publication reported that the expansion of the service to websites should have some impact on PayPal, which is a big player in the online payments market. The company is the most favorite online payment system among online retailers, with over 250 out of the top 500 online retailers using PayPal for online transactions.
A report from comScore suggesting that last year online retailers had 20% more visits to their mobile websites than their mobile apps during holiday shopping season. Mostly people use desktop computers and laptops to shop online.
As we mentioned earlier, to use Apple Pay on desktop websites, users will require a Mac computer with a Safari web browser and an iPhone.
Mid-Term Risk To PayPal
Last year, Apple Pay U.S. e-commerce payment volume was about $1 billion, according to Barrons. Analysts at Pacific Crest Securities said that the payment volume could approach $10 billion in 2017 and $21 billion by 2018. They believe that near-term volume growth at PayPal is likely to remain robust, but if more merchants adopt Apple Pay, it could generate mid-term risk.
Apple Pay Expansion
Apple Inc. is working aggressively to expand its payment system beyond the domestic market. It recently inked deals with big five bank holdouts of Canada. The mobile payment service is now available in Canada, Singapore, the UK, Australia, China and the U.S. The Cupertino-based tech giant is planning to expand the service to Japan, Brazil and France. The company has been expanding its mobile payment product, with addition of 34 credit unions and banks.
China is the world’s biggest market for smartphones, with over 350 million mobile phone users by the end of 2015. The market is also the iPhone maker’ second biggest in terms of revenue, although the company is yet to replicate the same success with its mobile payments division. The company launched its mobile payment platform in China early this year in partnership with Industrial and Commercial Bank of China Ltd. The lender will be joined by 19 other peers who have been listed as official partners for the U.S. tech giant’s mobile payment platform.
Shares of Apple Inc. have been struggling this year. The stock has dropped by 23.46% during the past 12 months.