Paypal leads the mobile payments system market
In the previous part of this series, we discussed why the NFC market has huge growth potential and why Apple (AAPL) is set to leverage this growth with the iPhone 6. We also discussed that although retailers have been slow in upgrading their system to be compatible with NFC technology, this trend could change once Apple introduces the technology on the iPhone 6.
In the prior part of this series, we mentioned that the mobile payment or mobile commerce market has huge growth potential. Until now, eBay’s (EBAY) Paypal has been the preferred mode for mobile payments.
According to a survey conducted by IDC, more than one-third (approximately 37%) of respondents reported using a mobile payment method of some kind. Of these respondents who used mobile payments, approximately 59% used Paypal, while the rest of respondents used Amazon (AMZN) payments and Apple iTunes.
iOS drives five times more online sales than Android
Apple has huge potential in the mobile payments market, though. According to a U.S. online retail holiday 2013 shopping report from IBM (IBM), the percentage of total online sales through Apple iOS was about five times higher than through Google’s (GOOG) (GOOGL) Android operating system. About one-fourth of overall online traffic was through Apple devices. On average, iOS users spent about $122 per order compared to $106 for Android. Apple would do well to enable these payments to go through its own payment system rather than competitors’ systems.
Plus, Apple possesses extensive user data of 800 million iTunes accounts along with credit card details. Apple could leverage these accounts for its own mobile payments system that it’s expected to release along with the iPhone 6. This shows that there’s a huge potential for Apple’s new mobile payment system.