Computer Services experts at investment firm J.P. Morgan as well as analyst Rod Hall and his team have concluded that Apple might debut its so-called ‘iWallet’ service as merely a credit card proxy system that would allow people to carry virtual versions of select credit cards on their mobile devices (via AppleInsider).
Hall adds that Apple would only collect a small transaction fee, roughly “around a penny per use”. Furthermore, he notes that Apple may not support debit cards initially due to the fact that debit cards are directly tied to bank account funds. So even if all 444 million iPhone users were to utilize ‘iWallet’ for 100% of their credit card transactions, Hall estimates that “the penny-per-use sum would lift the company’s earnings by just 0.5%, or 4 cents”.
“In that respect, Apple’s anticipated mobile payment system is not expected by Hall to have a significant effect on the company’s bottom line. He believes Apple’s rumored payment system is more about locking users in to the iPhone and larger iOS ecosystem, making it harder to leave for competing platforms like Google’s Android. Hall noted that Apple could also become a merchant of record, which would require it directly interact with merchants.
Finally, he said Apple could become a full-fledged credit card issuer, which offers the most attractive economics. In Hall’s estimates, this approach could add about 11 percent to his 2015 earnings per share forecast.”
Recent reports suggests Apple has already signed deals with Visa, American Express and MasterCard for the payments, bringing the world’s top credit card companies onboard for launch of its ‘iWallet’ service.