The Other Side of Apple: Financial Technology Giant

Apple released the iPhone 15 series on Tuesday, but it didn't mention that Apple Pay is quietly growing into a "financial technology" giant.

This not only brings more competition to the payment field, but also gives iPhone users more reasons to stay in Apple's ecosystem and buy new phones continuously.

About Apple Pay

Apple Pay was launched in 2014, but it only started to become popular in recent years. Apple Pay is a digital wallet that can store credit cards and was launched in partnership with Goldman Sachs. iPhone users can shop in stores using contactless terminals or make online payments using Apple Pay.

Analysts at MoffettNathanson estimate that Apple Pay processed $600 billion to $700 billion in payments in 2022. They also stated that Apple Pay's market share is increasing as a payment option.

They wrote that Apple's P2P platform and cashback service, Apple Cash, have not been as successful, and its Apple Card has only 7.5 million users with a mediocre response.

However, in August of this year, Apple announced that it had launched a high-yield savings account in collaboration with Goldman Sachs in April, which currently has deposits exceeding $10 billion and a yield of 4.2%.

None of these will affect Apple's revenue base. According to general predictions, Apple's revenue base is estimated to be $389 billion this year.

Impact on Payment Companies

This also poses challenges for existing companies in the payment field. Apple's growing range of financial products includes Apple Pay Later and Apple Cash.

In their report, they wrote: "Due to Apple's scale, commitment, resources, and extensive user base, it has become the most powerful tech giant in the payment field."

They also mentioned that among payment companies, Apple has the "most direct negative impact" on PayPal. In the past three quarters, PayPal's branded payments have only achieved single-digit growth.

They believe that Block will face "moderate negative impact" from Apple because their most direct competition is buy now, pay later, with Afterpay for Block and Apple Pay Later for Apple.

Similarly, another participant in the buy now, pay later sector, Affirm, is expected to face "moderate negative pressure" from Apple.

Traditional payment companies face a smaller threat from Apple. Visa and Mastercard face a "low" threat, while American Express may benefit from Apple.

Considering these pressures, investors seem disappointed with payment stocks while giving Apple's growth in the fintech sector a certain premium. Although Apple's stock price has recently fallen, it has still risen by 35% this year. PayPal has fallen by 11.8%, and Block has fallen by 13.5%.