Apple Pay finally launched in the UK this week after a successful roll-out across the United States.
Apple Pay is designed to shake up the mobile payments market and, as Apples iPhone has a 20% share of the global smartphone market, theres a real chance that the company could soon dominate the mobile payments world.
Apples mobile payment system uses anear-field communications, which allows you to linkpayment cards to your iPhone, iPad or Apple Watch and pay for items in stores.
Its clear that Apple Paycould be A threat to competitors like Monitise (LSE: MONI), Paypoint (LSE: PAY) and Optimal Payments (LSE: OPAY). Apple already has the infrastructure in place to connect customers with banks and other payment networks. Indeed, within weeks of launching in the US, Apple Pay had grabbed a 2% share of the US mobile payments market, thats around $1bn worth of transactions per annum.
Working with developers
Optimal Payments has tried to capitalise on the success of Apple Pay by launching its own iOS software development kit for Apples payment system. The software allows allowing developers, merchants and partners to add Apple Pay In-App Purchase as an accepted payment option on Optimals own payment system. If everything goes to plan, Optimals decision to incorporate Apple into its own network should help it piggyback off Apple Pays growth.
Monitise is also looking to piggyback off Apple Pays growth. The company plans to help its key bank clients and Apple co-operate. In a statement released this week, Monitise shed some light on the issue:
As Apple Pay opens its APIs we can enable our banking clients payment scheme and private label cards into the Apple Wallet just as we support them in all of their mobile banking needs today using our secure API-based cloud platform. Via the app design and build services we offer from our Monitise Create division, we can help retailers with in-app purchases.
Lack of options
Paypoint is looking on Apple Pays lack of payment options. Specifically,Paypoint is the UKs leading payment collection network used mostly for the cash payment of bills and services. The company bridges the gap between cash and non-cash payments, which means that the company is in a unique position. AsDan Salmons, managing director at PayPoint Mobile and Online, has put it, the success of mobile payments relies on maintaining an element of choice for the consumer.
Apple Pay may offer a sleek, seamless way to pay, but forthose without a smartphone orbank account thats compatible with the service, other cashless payment options remain the better choice.
The bottom line
Overall, Apple Pay is broadly good news for Optimal, Paypoint and Monitise. Its widely believed that service will increase the take-up of mobile payment solutions among consumers, which is great news for the industry in general.
Monitise and Optimal are looking to benefit from this growth by integrating their systems with Apple Pay. On the other hand, Paypoint has its own niche in the market, which is unlikely to be impacted by Apples new service.
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Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK owns shares of Monitise and Apple. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.