March 9, 2015
With iPhone 5/5S/5C and iPhone 6/6 Plus unit sales crossing the 200 million mark recently, the upcoming Apple Watch has the opportunity to create an additional 125 million+ Apple Pay users (iPhone 5C, 5S, and 5). Apple Watch (with NFC chip inside) is expected to enable Apple Pay transactions even with iPhone 5C, 5S, and 5.
With Apple Pay poised for launch, Apple executive Eddy Cue revealed more details on how Apple Pay will work on the Apple Watch. Eddy explained that as long as the iPhone is in close proximity to the watch, and the watch is unlocked, users can simply double tap the watch’s side button to enable payments. There won’t be any need for TouchID or a passcode, as reported by Mashable. Eddy also revealed that Apple Watch users would be able to use Apple Pay even if they are using iPhone 5 models, since the Apple Watch itself will be NFC enabled.
A recent report from CNET also revealed more information on the subject. Apple’s mobile payments service will work on the smartwatch as long as the device is unlocked with a passcode or through an iPhone. Users can either enter a password on the smartwatch itself or use TouchID on their iPhones in order to unlock the smartwatch. When Apple Watch was announced back in September last year, it was mentioned that Apple Watch would also work with some older iPhone models such as iPhone 5, iPhone 5S, and iPhone 5C.
It seems that Apple Pay will also work on some older iPhone models. The lack of NFC limited the use of these older iPhone models for payments and there was no sign of a solution allowing Apple Pay to work on older iPhone models. Now Apple Watch will be the key to filling this gap. For Apple, extending Apple Pay to older iPhone models is crucial to further boosting Apple Pay’s reach.
Considering the historical sales figures of iPhones, from the iPhone 5 to the current iPhone 6 models, over 200 million units have been sold to-date, and that number is ever increasing. Although iPhone 6 sales are increasing at a rapid pace, the inclusion of older iPhone models will vastly increase the user base of Apple Pay. Thanks to the upcoming Apple Watch, Apple Pay will receive a major boost and a chance to capture a major share in the mobile payments space.
In January this year, Apple cited that Apple Pay accounted for $2 of every $3 spent using contactless payment methods. Apple Pay has increased its number of partners multiple fold since its launch. The updated Apple Pay page shows a substantial growth in the number of banks, merchants, and apps that support Apple Pay. 90 US banks now support Apple Pay, and it can now be used for in-app payments in 58 apps and in-store payments across 47 merchants.