Why is Apple looking to partner with payment networks?

Puneet Sikka - Author

Aug. 18 2020, Updated 6:31 a.m. ET

Apple is reportedly partnering with payment networks for a mobile payments system

In the previous part of this series, we discussed the celebrity photo leaks that happened a few days back on Apple’s (AAPL) iCloud system. We also discussed the potential harm that these issues could have on Apple’s reputation. Apple has been considered a secure smartphone player until now.

However, Apple is expected to release the iPhone 6 on September 9. Its success could make people forget these issues. In addition to a bigger-screen iPhone 6, Apple is expected to introduce a few more attractive features.

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According to a report from Bloomberg, Apple has partnered with payment networks like Visa (V), MasterCard (MA), and American Express (AXP) for its new mobile payments system that it’s expected to release with the iPhone 6. The iPhone 6 is expected to have a near-field communication (or NFC) chip through which users can complete their transactions.

Although NFC technology can transfer any type of data between two devices, it’s mainly used as a mobile payment system. NFC technology has already been adopted by many Google (GOOG) Android and Microsoft (MSFT) Windows-based smartphones.

The mobile commerce market’s expected to show strong growth

Apple’s motivation to bring NFC technology to the iPhone 6 could come from the fast growth analysts expect from the mobile commerce market.

According to eMarketer and as shown the chart above shows, the U.S. retail mobile commerce market will grow from $42 billion in 2013 to $58 billion in 2014 at a 37% growth rate. The report also predicts that this market will grow to $133 billion by 2018, accounting for nearly 27% of retail e-Commerce sales.


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