Apple Pay’s New Features Could Be Boon to Banks
Artificial intelligence (AI) starred in Apple’s recent developers’ conference, but payments still played an important supporting role. And as The Wall Street Journal (WSJ) reported Saturday (June 15), the tech giant’s enhancements to Apple Pay might be good news for banks. Among the announcements at the WorldWide Developers Conference was a new feature that will […]
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Artificial intelligence (AI) starred in Apple’s recent developers’ conference, but payments still played an important supporting role.
And as The Wall Street Journal (WSJ) reported Saturday (June 15), the tech giant’s enhancements to Apple Pay might be good news for banks.
Among the announcements at the WorldWide Developers Conference was a new feature that will let banks offer buy now, pay later (BNPL) installment payments through Affirm via their cards integrated with users’ Apple Pay wallets. Apple says Citi, Synchrony and Apple Pay issuers using Fiserv will be part of the initial launch.
The WSJ report noted that BNPL options have been a threat to banks’ credit card businesses, which makes this new arrangement a victory for banks, letting them offer an installment-payment option at the point of purchase.
In addition, Apple is also rolling out the ability to pay for a purchase with card rewards, “adding that much more value to those points, and giving banks another opportunity to win a transaction,” the WSJ report said. Discover, Synchrony and Fiserv’s issuers will be the initial participants, Apple has said.
Writing about the launch last week, PYMNTS wrote that Apple’s “moves essentially untether Apple Pay and the wallet functions from the iPhone — and to a broader range of devices.”
“Consider the consumer who might have an iPhone wielded in everyday life but may have a laptop that’s a workhorse during the business day, or a Chromebook that’s dedicated to academics,” that report added.
The PYMNTS Intelligence report “Apple Pay Use in-Store Gets Boost From Tap to Pay” found that roughly half of consumers who used a digital wallet in-store used Apple Pay. But that’s still a mid-percentage point share of overall purchases, so there is room to gain ground. The share of eligible in-store transactions with Apple Pay grew 24%, from 6.3% in 2022 to 7.8% in 2023.
Apple has said in the past, according to management commentary on earnings calls, that the company’s services growth has soared partly due to transacting accounts and paid accounts growth, which both stood at double-digit percentages year on year.
“By uncoupling Apple Pay and the digital commerce functions from the hardware (which declined in several categories year on year except the iMac), Apple is less reliant on new Apple-specific product sales to keep wallet installations and use on the upswing,” PYMNTS wrote.
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