Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

Market Insanity

Tim Cook: Apple Pay Grew by 450%

The number of Apple Pay transactions grew by 450% over the past year, Apple (NASDAQ: AAPL) CEO Tim Cook told analysts. If Cook is correct, Apple Pay’s payment volume is four times larger than it was last year.

“We’re seeing strong growing usage as points of acceptance expand, with transaction volume up 450% over the last 12 months,” Cook said during his company’s quarterly analysts’ call. “With the launch of Taiwan and Ireland in the March quarter, Apple Pay is now live in 15 markets with more than 20 million contactless-ready locations, including more than 4.5 million locations accepting Apple Pay in the US alone.”

Apple Pay Transaction Volume has grown by 300% in UK

Cook provided a few tidbits about Apple Pay’s recent growth, NFC World reported.  The highlights included:

  • The volume of Apple Pay transactions in the United Kingdom has grown by 300% since last year.


  • The number of places where one can use Apple Pay in the UK has grown by 44% since last year.

  • There are now 20 million Apple Pay transactions in Japan each month.


  • Around half a million transit riders in Japan are paying with Apple Pay.


  • It is now possible to send virtual “Starbucks gift cards” via Apple Pay and iMessage.


Apple Pay Information Tim Cook is hiding

Tim Cook is hiding some important data about Apple Pay, for example he did not say how many users the digital wallet actually has. Cook’s omission of that important detail was deliberate; because it would show small Apple Pay’s footprint really is.

My guess is that Apple Pay is far smaller than PayPal (NASDAQ: PYPL); which had 203 million active accounts in first quarter 2017 according to Statista. Apple’s solution also probably lags far behind the world’s most popular digital wallet, Ant Financial’s Alipay which has around 400 million users.


It probably is not even close to India’s Paytm which has around 200 million users. Something else Cook neglected to mention was that Apple Pay is not yet available in India – one of the world’s biggest markets.

Then there are those 4.5 million locations in the U.S. that take Apple Pay. They do not include almost every major name in American retail.

They don’t include America’s largest retailer; Walmart Stores Inc. (NYSE: WMT), the nation’s largest standalone grocer Kroger (NYSE: KR), drugstore giant CVS Health (NYSE: CVS), the second largest discounter Costco Wholesale (NASDAQ: COST), home-improvement goliaths Home Depot and Lowe’s, and the third largest discounter Target (NYSE: TGT) to name just a few.

Apple is losing the Payment Wars

Cook’s remarks indicate that Apple is lagging behind PayPal and Ant Financial in the payment wars. Even the Starbucks messaging feature he mentioned sounds a great deal like PayPal’s Venmo social media money transfer solution. Venmo’s payment volume grew by 114% or $900 million during first quarter of 2017, Business Insider reported.

Venmo makes up just seven percent of PayPal’s payment volume but that number is $6.8 billion. Now all PayPal needs to do is figure out how to make money from Venmo.

This also shows a potential drag on Apple’s revenues because banks charge PayPal a transaction fee every for every Venmo transaction. Yet, Venmo is free to users, I imagine Apple Pay’s P2P service operates much the same way.

It looks as if Apple is losing the payment wars. Apple Pay might turn out to be a dud or a niche product rather than a serious competitor.