We’ve been working quite a bit in the secure payments area so the recent ChangeWave survey results around Apple Pay grabbed our attention. As we suspected Apple Pay is a game changer in a massive industry. You might find yourself nodding away at the points and pictures below but pinch yourself – this is a big deal. Mobile devices will be taking over a significant portion of payments rapidly – finally moving this market into commercial status and putting acute pressure on device makers and software platforms like Android to catch up. We also expect the market for non-phone-based smart wallet technology to be lifted by the acceptance of Apple Pay as well.
We’ll keep it down to simple bullets and pictures:
1. PayPal should be very worried about Apple Pay. Look at how the two reversed position in terms of consumer preferences in just three months! That’s huge.
2. Apple has squarely addressed the two major obstacles to increasing adoption of mobile payments.
3. 28% of consumers reported that it was “likely” or “very likely” that they would use Apple Pay and these are the top areas cited for use. The strength of the “dining out” option is higher than we would have expected. It makes the payment plan by Open Table (prior to the PCLN acquisition) seem more sensible although it’s now probably DOA thanks to Apple Pay.
4. Although this is a major turning point there’s still work to do and plenty of opportunity. Security is still a big issue for the majority of consumers and it should be remembered that only a small minority of people will be carrying an iPhone 6 or better for a while.
In summary this is an expected but very strong set of results for Apple Pay in particular and we think further for increased adoption of digital payments. Smart wallets, smart watches and other personal technologies will all integrate with a new digital payment infrastructure.
(We strongly recommend ChangeWave for investors and companies looking into emerging technology trends. Shoot us an email and we’ll be happy to point you to the right person there to set up a subscription. )
[Specific disclosures related to this post – Long position in AAPL, long position in MOLG, advisor to NXTD, actively seeking other advisory work and/or investments in mobile payments.]