Despite the Canadian launch of Apple Pay being nothing more than a rumour, analysts have been busy estimating the impact it will have when it eventually does launch. First to step up with an estimate was Cormark Securities’ Meny Grauman. According to Grauman’s forecast, Apple Pay will have an “immaterial” impact (via the Globe and Mail).
Apple Pay currently accounts for 1% of all mobile payment transactions in the US, but this figure is projected to grow to about 15% within four years. Apple has announced that it will launch the mobile payment platform in the UK this month – possibly next week – but a Canadian launch is rumoured only for this fall.
Looking at the available data, Grauman found that the annual per-share earnings effect on RBC, TD Bank, and the other four major banks would fall an average five basis points if Apple takes 5% of all mobile payment transactions. (In the light of the slow adoption numbers, this would take some time, though.)
“Even at a 25 per cent adoption rate, which is a very tall order, the EPS impact on the large Canadian banks would still be immaterial to overall earnings,” Mr. Grauman said.
Grauman goes further and describes the best-case scenario for Apple Pay: taking 25% of all mobile payment transactions. In that case, lenders would see an annual profit drop of 0.23%, he said, assuming that Apple takes 15 basis points of interchange fees.