Apple Pay is Attempting to Take over the Banking Industry

Apple Pay is a method of payment that is used on iPhones and is quickly gaining popularity as the years pass. This is making banks worried that they may lose customer loyalty and that Apple may top them.

Apple Pay is starting to become more popular. Only a minority use it right now, but it is starting to gain popularity. Apple Pay is great because it can be used quickly, it is digital, so you cannot lose it, and it can be used in emergencies when a person misplaces or forgets their wallet. As great as Apple Pay may be, it is not so great with banks. People who use Apple Pay are giving it more credit and acknowledgment than they are their own banks. The banks believe that using Apple Pay or any other mobile paying applications could take away the loyalty of their customers. As much as this could be an ill omen for banks, they are shockingly not resisting it. Many banks are ready to cede ground to not only Apple but also Google and Samsung. The first time Apple Pay was able to be used was back in 2014, and now, at least once a month, it is used by around 12 million people. It is predicted to more than double to 25 million by the end of 2016. Also, by 2015, the amount of money spent over the phone was $8.7 billion. That number is predicted to increase to $210 billion by 2019. Apple Pay is not the first digital paying service that is a threat to banks. As far back as 1998, PayPal has been a threat to banks. Many stores are now adjusting to handle digital payments because it is becoming much more popular. This action will help increase the popularity of Apple Pay and other digital payment services. The two most prominent fears that banks have are that they will not be the most used card in the digital wallet and that these digital payment services may go deeper into the bank region. Most banks are struggling with these fears and are hoping that they will be the most used card and that this will be the first and last advancement of these companies into the bank district. Basically, the worst-case scenario for banks is that they have all the risk and do not get the best profits. Analysts estimate that Apple gets half of a cent from the banks on all debit card purchases in-store. Apple Pay has gotten Apple $15 million in gross revenue in just its first year. In the end, the Banks are just doing their best not to let Apple surpass them and to keep the loyalty of their customers.

This is important since Apple could take over the banking system. The situation is bad for banks because Apple now poses a huge threat to banks. Banks have a lot more concerns to deal with. They now have to worry about keeping their customers and defending against Apple's financial services conquest. They have to do their best to now compete with Apple.

References

1. Banks Are Ceding Ground to Apple Pay. (n.d.). Retrieved February 26, 2016, from
2. http://www.bloomberg.com/news/articles/2016-02-18/banks-are-ceding-ground-to-apple-pay

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