Product Code: VR1151MR
Apple Pay is a major milestone in the evolution of mobile payments, partly as it bears what Forbes lists as the world's most valuable brand. Apple Pay is seen by many as an inflection point, and its development over the next three to five years has the potential to shape the payments industry for decades to come. According to Apple CEO Tim Cook, Apple only ventures into areas where it can control the primary technology, which perhaps hints at Apple's plans in the payment industry.
Apple's current business model follows a cooperative approach, with almost all major card networks, issuers and acquirers supporting the launch of Apple Pay. EMV migration in the US plays a pivotal role in Apple Pay's adoption. Merchants are in the process of upgrading their POS terminals to EMV, which in most cases will also comprise NFC hardware (NFC-capable terminals). These terminals only require a simple software upgrade to be activated (NFC-enabled terminals). POS vendors and acquirers are expected to offer bundled deals for merchants to simultaneously upgrade their terminals to EMV and NFC, resulting in an accelerated expansion of NFC acceptance.
However, Apple could face a challenge in terms of allocation of merchant service charges with other payment participants, especially as regulators across the world cap interchange fees. Timetric's primary research has identified different points of view regarding the expansion of Apple Pay beyond the US. Some industry experts argue that low interchange fees outside the US, especially in Europe, will discourage Apple from entering these markets, while others stress that Apple is not expecting substantial profits from Apple Pay; the solution is mainly intended to decrease the commoditization of Apple's products.
The report provides insights into Apple's mobile payment solution, Apple Pay:
- It analyzes factors contributing to adoption of Apple Pay along with challenges.
- It analyzes Apple Pay's impact on payment security.
- It explores whether merchants and consumers are ready to accept Apple Pay.
- It outlines its potential impact on key market participants and competitors.
- It explores whether Apple Pay is a game changer for mobile payments and NFC.
- This report covers the competitive landscape for Apple Pay.
- It provides a comparative analysis of hardware-based secure element vs cloud-based host card emulation technology.
- It discusses impact of Apple Pay on key card schemes, issuers, POS vendors, merchant acquirers, mobile network operators and smartphone manufacturers.
- It analyzes the impact of EMV migration in the US.
Reasons To Buy
- Gain understanding of innovation and the changing landscape in the global payments market. Is Apple Pay likely to become a mainstream payment solution in North America?
- Understand how will Apple Pay affect consumer payments in Europe and the rest of the world.
- Gain insights into competitive threats and opportunities from emerging, new and potentially significant operators in the global payments market.
- Gain an insight into the winners and losers in the new environment.
- Understand how Apple Pay will affect payment technology requirements, industry standards, security and the overall payments ecosystem.
Table of Contents
1. Executive Summary
2. Demystifying Apple Pay
- 2.1. Driving Factors and Challenges
- 2.2. Is Apple Pay an Innovation or Permeation?
3. Impact on Payment Security
- 3.1. The State of Card Fraud in the US
- 3.2. Apple Pay's Impact on Card Security
4. The Secure Element vs Host Card Emulation Conundrum
5. Competitive Landscape in the US and Beyond
- 5.1. The US
- 5.2. Penetration and Competition outside the US
- 5.2.1. Potential markets for Apple Pay
- 5.2.2. Competition to Apple Pay outside the US
6. Are Consumers and Merchants Ready to Accept Apple Pay?
7. Apple Pay - Impact on Key Market Participants
- 7.1. International Card Networks
- 7.2. Card Issuers
- 7.3. POS and Technology Vendors
- 7.4. Main Competitors in Mobile Payments
- 7.4.1. Google wallet
- 7.4.2. Softcard
- 7.4.3. CurrentC
- 7.5. Smartphone Manufacturers
- 7.6. Merchant Acquirers
- 7.7. Mobile Network Operators
8. Is Apple Pay the Inflection Point for Mobile Payments?
- 9.1. Methodology
- 9.2. Contact Timetric
- 9.3. About Timetric
- 9.4. Timetric's Services
- 9.5. Disclaimer
List of Tables
- Table 1: Levels of Card Security
- Table 2: Apple Pay vs Current and Potential Competitors in the US
- Table 3: Zapp in the UK, December 2014
- Table 4: Potential Competitors Outside the US
- Table 5: Key Stores and Apps Accepting Apple Pay, November 2014
- Table 6: Apple Pay - Most Used Merchant Locations in November 2014
- Table 7: Digital Enablement Service Fees
List of Figures
- Figure 1: Apple Pay - Drivers and Challenges
- Figure 2: Card Fraud in the US (US$ Billion), 2014E
- Figure 3: Card Fraud - the US vs Europe, 2010-2014E
- Figure 4: Secure Element vs Host Card Emulation
- Figure 5: NFC-Enabled POS Terminals, 2014E
- Figure 6: EMV Migration Timeline in the US
- Figure 7: MSC Revenue Share of a Typical US$100 Credit Card Transaction through Apple Pay
- Figure 8: Non-Card E-Commerce and Mobile Payments (US$ Billion), 2010-2014