Apple Inc. (NASDAQ:AAPL) has revolutionized how people pay for things, after nearly a decade of failed attempts made by services such as banks and telecom companies. Apple Pay largely engulfed other failed experiments such as cash cards and has been a hit in the United States.
Apple Pay was launched in September 2014 and has been witnessing a major growth in the number of people using it. The company claims that Apple Pay accounts for nearly $2 out of $3 spent in what we popularly know as “contactless payments”.
However, the challenge for Apple will be to spread this service in the international market as well. Apple Pay is a service, which is largely limited to the U.S. presently. The absence of a unified payment market will prove to be a hurdle for the tech giant. Often, countries across the globe are the settlements of different credit card associations, telecom operators, and warring banks. However, payment references as well as regulatory regimes can vary widely in these areas.
Andrew Humphrey, technology analyst at Morgan Stanley, says that each unique market will be having “different local players”, along with other differences such as standards, partnerships, levels of cooperation and different economics as well. He also believes that Apple would be looking to negotiate with “smaller number of banks” in each unique market.
Apple Pay utilizes NFC technology (Near Field Communication) and allows customers to pay by simply holding their Apple devices near readers. These readers are installed by store merchants and people using devices such as iPhones, smartwatches and iPads will be able to use them. Although difficulties are many, it still is a giant untapped market for Apple. The global customer base for this concept is huge as there are more than 800 million Apple users, who have already synced their credit cards and debit cards with their iTunes accounts.
It is believed that China, Britain, and Japan are the most likely places to be targeted by Apple Inc. (NASDAQ:AAPL).