Let’s be clear: everyone (except me, apparently) wanted a bigger phone. They’re going to get that with the new iPhone 6 and 6L. And the Apple WATCH, with it’s beautiful design, fitness tracking capabilities and deep integration with the iPhone is going to be a big hit. (A very big hit, in fact.)
But the announcement that stole the show was also the one that you might have missed. It was the introduction of Apple Pay. Apple’s new payment system will work in tandem with an NFC chip built into the phone and rely on the already-popular fingerprint scanning security features. In theory, it will make it simple for you to pay for nearly anything without ever reaching into your wallet.
At launch, there will only be about 200,000 place where you’ll be able to use this new process, but look for that number to grow very rapidly over the next couple of years. The reason this is such a big freaking deal is this: everyday, Americans process more than $12 billion dollars in credit and debit card payments. If they can convert these transactions to happen in their ecosystem, Apple stands to make a tiny percentage on each one of those transaction. A tiny percentage; so small no one will really notice. But pick almost any tiny number you like and then multiply it by 12 billion. The result won’t be so tiny anymore. That’s the size of the market, theoretically available for a cash influx, every single day.
Of course, they won’t get all of them and there are certainly competitors in the market. To be sure, Google Wallet has been around for awhile without making much of a dent in the market. But let’s not forget there were other MP3 players before the iPod and there were other phones before the iPhone and there were other tablets before the iPad. Apple has consistently shown they can become the dominant player in key industries by exercising a willful amount of patience and skillful execution. I fully expect Apple Pay to have precisely the same results.
Might be time to take another look at picking up some Apple stock. (AAPL)
(For a more detailed look at Apple Pay, see this article from The New York Times Technology section: With Apple Pay, a Push Into Mobile Payments)