After years of speculation, Apple finally unveiled its hand today in the mobile payments industry. It is launching Apple Pay, which is a mobile wallet feature for the new iPhone6 / iPhone6 Plus portfolio.
As expected, Apple Pay combines an NFC phone with a secure NFC element, dynamic (changing) security codes, TouchID fingerprinting, Passbook, and ties it all in to the millions of credit cards the company has on file inside iTunes.
Apple Pay will start in the United States in October 2014. The US is the world's largest credit card market, so it is no surprise to see this is their first target. Some of the rest of the world, such as the UK, will follow by 2015.
Partners include most major banks and payment networks, such as Citi, Bank of America, Visa, MasterCard and Amex. Several big stores are onboard, including Subway, Nike and Staples. However, our WMS (Media) service estimates that just a modest percentage of all retail stores in the US can currently accept Apple Pay -- that will be an early barrier to uptake.
Rivals, such as Softcard and MCX, will be very worried by this new development from Apple Pay. Some US operators, like T Mobile, may be upset by Apple encroaching on "their" mobile payment territory.
Apple is now entering a huge NFC phone market that our WDS (Devices) research service forecasts will reach 500 million units in 2014.