2/14/2020
`
`Apple Pay on pace to account for 10% of global card transactions — Quartz
`
`PAYBACKApple Pay is on pace to account for 10% of all global card transactions
`
`February 11, 2020
`
`By John Detrixhe
`Future of finance reporter
`
`REUTERS/ADNAN ABIDI
`
`Opening up the wallet.
`
`FROM OUR OBSESSION
`Future of Finance
`New technology is upending everything in finance.
`
`Apple’s mobile wallet is gobbling up a growing chunk of card payments around the world. As the service grows, it’s
`becoming a greater challenge to rivals like PayPal and attracting the attention of competition watchdogs.
`
`Apple Pay accounts for about 5% of global card transactions and is on pace to handle 1-in-10 such payments by 2025,
`according to recent trend data compiled by Bernstein, a research rm. “There are indeed plenty of reasons to worry
`that Apple may attempt to disrupt the payments ecosystem,” Bernstein analysts, led by Harshita Rawat, wrote in a
`research note.
`
`As iPhone sales plateau, the Cupertino-based company is leaning into its services division, which includes Apple Pay.
`The unit generated $12.7 billion in revenue in the last three months of 2019, a 17% increase from a year earlier. The
`company’s payments ambitions have the benet of a massive cash hoard, years of experience in card transactions, and
`a vast customer base consisting of hundreds of millions of iPhone users.
`
`The digital payments race is an immense opportunity, representing about $1 trillion in revenue around world. Visa
`You have 2 free stories remaining this month.
`and MasterCard process more than $14 trillion of payments each year and are still growing as more transactions go
`Latest
`Members
`Obsessions
`Emails
`Editions
`https://qz.com/1799912/apple-pay-on-pace-to-account-for-10-percent-of-global-card-transactions/
`
`✕
`
`1/5
`
`IPR2020-00019
`Fintiv EX2021 Page 1
`
`

`

`Apple Pay on pace to account for 10% of global card transactions — Quartz
`2/14/2020
`online, ow through apps, and as consumers in many parts of the world use cash less often.
`
`Cumulative stock return for Mastercard, Apple, and Visa (3-year)
`
`MastercardMastercard
`VisaVisa
`
`AppleApple
`250%
`
`200
`
`150
`
`100
`
`05
`
`0
`
`’17
`
`’18
`
`’19
`
`’20
`
`Quartz | qz.com | Data: FactSet | Returns since February 2017
`
`Apple Pay makes money by taking a sliver of each transaction that runs through the device. Users can store their credit
`and debit cards on the wallet and use it to make contactless payments—beefed up with biometric security—through
`their phone’s near-eld communication (NFC) tech. In the US, contactless payments are forecast to increase to $1.5
`trillion in 2024, up from $178 billion this year, according to Juniper Research.
`
`There’s no shortage of slick, feature-rich payment apps out there, but Apple Pay has several advantages. The app is
`pre-installed on iPhones, and Apple has tight control over the device’s NFC technology that’s used for contactless
`payments. That’s why Apple Pay is the only iPhone mobile wallet that can make NFC transactions. (Alipay and
`WeChat Pay, the enormously popular Chinese payment apps, use QR-codes. The optical codes are read through a
`phone’s camera and aren’t controlled by Apple.)
`
`Academics, lawyers, and executives see Apple’s control over the iPhone NFC chip as a way to block competition and
`make its own wallet more popular. Apple argues that its policies are for security against hackers and to make the user
`experience as smooth as possible.
`
`Tech and card giants
`
`Apple CEO Tim Cook is aiming to give the wallet an extra boost by linking it to cash backs through the company’s
`credit card. Apple Pay revenue and transactions more than doubled in its last scal quarter, Cook said recently in a
`conference call with analysts, and the wallet is becoming more widely available for train and bus commuting around
`the world, with rollouts in Chinese cities like Shenzhen and Guangzhou coming this spring.
`
`Apple Pay probably won’t pose a challenge to the card giants anytime soon. While the tech company could, in theory,
`create its own network that runs outside the card systems, Bernstein argues that Apple still needs the card networks,
`which are ubiquitous and trusted. Visa and MasterCard, meanwhile, are used to dealing with partners (traditionally
`large card-issuing banks) with the kind of scale that even Apple Pay could muster.
`
`The same may not be true for other wallets. “Apple Pay is indeed one of the long-term competitive threats to PayPal,”
`Bernstein analysts wrote. For now, PayPal has a commanding lead in the world of online checkouts, and also benets
`You have 2 free stories remaining this month.
`Latest
`Members
`Obsessions
`Emails
`Editions
`https://qz.com/1799912/apple-pay-on-pace-to-account-for-10-percent-of-global-card-transactions/
`
`✕
`
`2/5
`
`IPR2020-00019
`Fintiv EX2021 Page 2
`
`

`

`Apple Pay on pace to account for 10% of global card transactions — Quartz
`2/14/2020
`from network effects that have been building up since the turn of the century. But Apple and PayPal could end up
`competing for the same turf in the coming years.
`
`In the meantime, European ofcials are eyeing Apple Pay more closely. German lawmakers recently passed a  measure
`that would require tech companies to open up their interfaces for payment services, but domestic lenders, including
`Deutsche Bank, have reportedly decided not to take advantage of Apple’s NFC interface.
`
`And the European Commission is probing Apple’s control over the iPhone’s NFC tech, marking the second time EU
`ofcials have scrutinized the mobile wallet’s impact on the market. The commission’s earlier, preliminary view was
`that there was sufcient competition, but that could change as Apple Pay uptake increases.
`
`John Detrixhe
`Future of finance reporter
`If you liked this article, you may enjoy Future of Finance, a weekly email about the people and ideas that are
`changing the world of money.
`
`Enter your email
`
`Stay updated about Quartz products and events.
`
`apple, edited by pete gelling, tim cook, visa, paypal
`
`READ THIS NEXT
`
`Scientists say the pangolin endangered by Chinese
`smuggling may have passed the coronavirus to humans
`February 13, 2020 • Quartz Africa
`
`RECOMMENDED STORIES
`
`NO INFO
`Three things the Chinese government tried to hide during the novel coronavirus outbreak
`Quartz
`
`(cid:0)
`Atorney general Bill Barr gets an ethics complaint for Valentine’s Day
`Quartz
`
`You have 2 free stories remaining this month.
`Latest
`Members
`Obsessions
`FIGHTING IT OUT
`https://qz.com/1799912/apple-pay-on-pace-to-account-for-10-percent-of-global-card-transactions/
`
`Emails
`
`Editions
`
`✕
`
`3/5
`
`+ Add your insights
`
`💬
`IPR2020-00019
`Fintiv EX2021 Page 3
`
`📮
`

`

`2/14/2020
`
`Apple Pay on pace to account for 10% of global card transactions — Quartz
`
`FIGHTING IT OUT
`How an Indian state successfully fought and contained the deadly coronavirus
`Quartz India
`
`COMING THROUGH
`The number of Nigerian immigrants to Canada has tripled in the last five years
`Quartz Africa
`
`GETTING READY
`The lessons of West Africa’s Ebola’s crisis will save the continent from the worst of coronavirus
`Quartz Africa
`
`VIDA AMERICANA
`America’s most controversial ofice-lobby mural has been resurrected
`Quartz at Work
`
`NOTORIOUS
`How SCOTUS justice Ruth Bader Ginsburg accidentally scandalized Equal Rights Amendment
`activists
`Quartz
`
`A BROADER SPECTRUM
`Gender stereotypes have made us horrible at recognizing autism in women and girls
`You have 2 free stories remaining this month.
`Quartz
`Latest
`Members
`Obsessions
`Emails
`https://qz.com/1799912/apple-pay-on-pace-to-account-for-10-percent-of-global-card-transactions/
`
`Editions
`
`✕
`
`4/5
`
`IPR2020-00019
`Fintiv EX2021 Page 4
`
`

`

`2/14/2020
`
`Apple Pay on pace to account for 10% of global card transactions — Quartz
`
`SILENCED
`Another citizen journalist covering the coronavirus has gone missing in Wuhan
`Quartz
`
`MIKE WILL MAKE IT RAIN
`Bloomberg is running the billionaire vote-buying campaign we expected from rump
`Quartz
`
`THE LONGSHOTS
`Your guide to the Republicans challenging rump in the 2020 presidential race
`Quartz
`
`OH SH—
`The diference between a snafu, a shitshow, and a clusterfuck
`Quartz at Work
`
`ENDEMIC PTSD
`Hong Kong’s coronavirus panic buying isn’t hysteria, it’s unresolved trauma
`Quartz
`
`You have 2 free stories remaining this month.
`Latest
`Members
`Obsessions
`https://qz.com/1799912/apple-pay-on-pace-to-account-for-10-percent-of-global-card-transactions/
`
`Emails
`
`Editions
`
`✕
`
`5/5
`
`IPR2020-00019
`Fintiv EX2021 Page 5
`
`