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Apple Inc. (AAPL) Pay is Working, But the Wallet is Very Much Alive

apple inc (NASDAQ:AAPL) Apple pay
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Apple Inc. (NASDAQ:AAPL) is moving ahead to push the widespread use of its mobile payment system, Apple Pay. Apple Insider reports that Apple has added new supporting U.S. banks for its Apple Pay service. Most of the major U.S. banks  have joined the Apple Pay service in late 2014. The new banks bring the total number of banks that support the service to 800.

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Merchant support is at the heart of Apple Pay

The firm is working to improve merchant support for the service as part of efforts to kill the wallet. Apple has not been able to drum up much merchant support for the mobile payment service. One of the reasons behind the slow merchant adoption is that Apple Pay requires NFC-enabled point-of-sales terminals and most of the merchants do not have NFC-enabled point-of-sales terminals.

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Nonetheless, Apple Inc. (NASDAQ:AAPL) already has word from some merchants who are making plans to adopt the payment service. Some of them are already making plans to upgrade their point-of-sales terminals to support NFC payments.

For instance, Domino’s Pizza has said that it would launch support for the service in the next couple of weeks, just before this year ends. Some other firms such as Cinnabon, Chili’s, KFC, and Starbucks have plans to adopt the service in 2016. Late last month, JCPenny announced that it has started testing Apple Pay support for its store cards. The store says it will officially roll out the service in spring 2016.

Apple Pay competition remains strong

Apple Inc. (NASDAQ:AAPL)  is finding it hard to make headway in the mobile payment space because the space is already crowded. The firm has to contend with a number of payment services such as PayPal, BBM Money and Square, as well as traditional payment methods. Other tech firms also have products in the mobile payment space; for instance, Google has Google Wallet and Android Pay and Samsung has Samsung Pay.

Traditional banks are also aware of the huge market for mobile payments and they are already bringing mobile payment products to the space. For instance, U.S. banks have launched a payment service called clear Xchange that is billed to cover about 80% of U.S. banks. At about the same time, Chase Bank showed its interest in the mobile. The bank has unveiled its Chase Pay service, which is designed to handle concerns about cost of payment, speed and ease of checkout.

In other news, the rumored 4-inch iPhone from Apple will have the A9 CPU and it will have NFC technology so that it can support the Apple Pay mobile payment system. The 4-inch iPhone is targeted towards emerging markets and consumers looking for a budget-friendly iPhone. It is a little too early to know if the 4-inch iPhone will push Apple Pay to more consumers; yet, we can agree that the tech giant is making all the right moves to ensure that the payment system gets a foothold.

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Victor Alagbe

Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.

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