Apple Inc. (NASDAQ:AAPL)’s reach has been steadily expanding since the mobile payment service was unveiled in 2014. Currently, the mobile payment service is now available in more than ten countries. In 2016, four were added and these include Spain, New Zealand, Russia and Japan.
In a recent earnings call the chief executive officer of Apple, Tim Cook, made the observation that user numbers had tripled and that the volume had increased by more than 500 percent. During the quarter four of 2016, a similar level of growth was experienced.
One-third of merchants
In the United States, a Boston Retail Partners survey shows that approximately 36 percent of merchants now accept Apple Pay. In the next one year, an additional 22 percent are expected to begin accepting the mobile payment system. This means that Apple Pay is likely to continue the growth momentum it has already embarked on. At present, Apple is the biggest mobile payments processor while Paypal Holdings Inc (NASDAQ:PYPL) comes second followed by Alphabet Inc (NASDAQ:GOOGL) Android Pay.
One advantage Apple Pay enjoys over Android Pay is the fact that Apple Pay is popular with those with higher incomes and who thus have more to spend. Apple Pay thus enjoys higher value per transaction as well higher volumes.
The future is in services
It is expected that with the prospects looking bright for Apple Pay, the Cupertino, California-based tech giant will be more aggressive in rolling out the service to more countries as well as increasing the number of merchants who accept it in its domestic market. As revenues from Apple Pay and other services from Apple continue to increase, this will help the iPhone market balance out on any revenue declines that may be recorded as a result of lower sales volumes of its devices.
In the most recent results released, revenues from services were about $7.2 billion. Revenues from the sales of the iPhone were, however, a staggering $54.37 billion. While iPhone sales might still dwarf services, the latter has better prospects as it grew at a faster rate and it is more sustainable in the long run.
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On Friday, shares of Apple Inc rose by 0.28 percent to close the day at $135.72.