Apple reports strong US Apple Pay rollout numbers, no word on Australia

More than 700 banks and other card issuers in the United States have joined Apple's NFC payments service, Apple Pay, since its launch last October.

Speaking on a conference call last week to release the company's December quarter results, Apple chief executive Tim Cook said Apple Pay accounted for two-thirds of Visa, MasterCard and American Express contactless payments across the US during the quarter.

According to NFC World, Cook said he was "unbelievably shocked, positively shocked" by the take-up of the service.

"There's tons of things on our roadmap of adding functionality to it. Were just in the US right now and so there's tons of countries to go and there is not a day that goes by that I don't get notes from many businesses outside the US wanting Apple Pay," he said.

Apple is widely reported to have reached agreement with banks in Canada to extend its contactless payments service to that market. At present, Apple Pay - unveiled with great fanfare in October 2014 - is only available in the US.

There's a widespread assumption that each of the big local banks, at least, as well as MasterCard and Visa, are at advanced stages of negotiation for an Australian rollout. But those in the know are holding the details tight.

Getting banks organised may be slog. Visa's global chief executive, Charles Scharf, told an earnings call last week that "to date 43 of our issuing partners have enrolled in our tokenisation services. These issuers collectively represent 75 per cent of our aggregate US payment volume and over 500 of our clients have signed the Apple Pay contract and we are actively working with them to enable the service."


MasterCard chief executive Ajay Banga told an earnings call last week that "we're putting [Apple Pay] into MasterPass, regular MasterPass over the next few - period of time. You'll see in a year or two's time, tokenisation will become kind of fiddlesticks in the game on ecommerce."

Retail banking research group RFi has estimated that Apple Pay could have 2.5 million users in Australia by the end of this year, assuming the service is launched in Australia this year.

RFi issued a report on Apple Pay in November, saying the system would be compatible with all local merchant terminals set up to handle PayPass, PayWave and ExpressPay contactless payments. It said 70 per cent of Australian consumers own a contactless card and half have used them.

RFi said a challenge for Apple in Australia was that banks were already in the smartphone contactless payment market. In August Google Australia's managing director said the company had no plan to launch Google Wallet in Australia, saying that "the Australian financial services industry is leading the global pack in servicing consumer needs, meaning the market for Wallet does not exist in Australia as it does in the US."

However the banks' payment solutions are limited to cards held with the institution. RFi believes this gives Apple Pay an advantage with consumers who have multiple banking relationships.

Another challenge is that consumers are concerned about being hacked, while others do not want to store financial information on mobile devices.

According to RFi research, 24 per cent of Apple users find the idea of a digital wallet appealing, compared with 12 per cent of Android users. Forty-five per cent of Android users said they had no use for digital wallet technology, compared with 34 per cent of iPhone users.

One of Apple's big advantages, according to RFi, is that "it controls the hardware and the software on all its devices, giving users an almost identical experience regardless of the device they are using. This allows Apple to create one payment solution that can be easily adapted to different devices."