Updated from 2:42 p.m. to include thoughts in the fourth paragraph.
SAN FRANCISCO (TheStreet) -- As Apple (AAPL) continues to expand beyond just iDevices, the massive profit and potential behind Apple Pay is one of the keys to the tech giant's revenue growth in the future.
Apple Pay will force retailers to roll out contactless payments, ultimately making customers more comfortable tapping phones to pay for items, said Pascal Caillon, general manager North America of Proxama, a contactless payment solutions company.
"Apple's foray into NFC (near field communications) is a landmark and will ignite the mobile payments market globally, but especially in the U.S. where adoption has lagged," Caillon said via email. "NFC is THE technology for point of sale payments and aligns with the card scheme work we have been doing for years, but now there is even more impetus for merchants to roll out contactless payments beyond the initial supporting merchants that Apple announced today."
Souheil Badran, Senior Vice President and General Manager for Digital River World Payments, believes this was the right move for Apple, as it eventually moves Apple Pay around the world. "For Apple, this looks like a timely move," Badran said via email. "The company has been laying the foundations for this
kind of initiative for some time: it introduced its Touch ID fingerprint sensor with its last iPhone launch and its iBeacon system of Bluetooth transmitters has now been available for about a year." The global mobile payments market was estimated to be worth $235 billion in 2013.
Apple's iTunes platform has more than 800 million accounts with credit cards linked to them, potentially making this a lucrative area for Apple. It's expected that Apple would collect a fee from the banks from payments made through Apple Pay, and with CEO Timothy D. Cook commenting on Tuesday about the $12 billion worth of daily U.S. e-commerce transactions, that could add up quickly for Cupertino, Calif.-based Apple.
Forrester Research expects the U.S. mobile payments industry to reach $90 billion by 2017, which indicates there is room for additional companies to enter the space aside from the industry leaders such as eBay's (EBAY) PayPal and Square. Citi Research has put a lower figure on the industry, at $58.4 billion, by 2017.
"Apple Pay will forever change the way all of us buy things," said Apple's CEO during Tuesday's launch of two new iPhones and a smart watch. To use Apple Pay, customers simply have to tap their phone to the credit card reader, while holding down the Home button on their iPhones.
"[The] Number of customers signed up now in partnerships Apple has developed account for 83% of bank transactions, all now will be possible on Apple Pay," Jeff Sica, president and chief investment officer of Sica Wealth Management, said in an email to TheStreet.
Apple Pay allows users to use the Passbook app, which already stores boarding passes, tickets, coupons and the like, by adding the credit card attached to their iTunes account by entering the card security code, and using the camera to take a picture of any other cards they might have.