The rapid penetration of Apple Pay functionality on Australian issued debit and credit cards has been a major development in domestic payments over the last four years.
Only a handful of small deposit taking institutions don’t offer Apple Pay to cardholders.
With all of the major banks now locked into distribution agreements with Apple Pay, the service now constitutes a material revenue-spinner for Apple Inc’s overall operation in Australia.
Cardholders who transact with an Apple Pay wallet attract no fees using the service.
However, mystery surrounds the average fees that Australian card issuers pay whenever their customers access the service.
In 2019 Banking Day revealed that Apple was then charging Australian banks and credit unions 4 basis points on the value of over the counter transactions when their customers used its wallet and 6 basis points for ecommerce or card-not-present transactions.
While this pricing appeared modest, at the time it meant that Australian banks were paying much higher fees than their US counterparts for giving their customers access to Apple Pay.
Today, it’s unclear whether those pricing arrangements persist.
Apple’s Australian subsidiary also keeps a tight lid on total transaction volumes, but following disclosures made by Commonwealth Bank CEO Matt Comyn last year to a parliamentary committee, most payments experts believe Apple Pay now accounts for around 40 per cent of all card-present transactions.
That makes Apple Pay a substantial payments business in Australia.
“If you crunch the numbers, Apple Pay’s local revenue must be running at around $500 million a year,” said Sydney payments expert, Brad Kelly.
It’s a view shared by Melbourne-based consultant Grant Halverson.
“The pandemic must have given Apple Pay a massive kick with the customer shift to digital wallets and most local ADIs now offering it to their customers,” he said.
Apple Inc’s Australian subsidiary last week filed its latest financial accounts with local regulators.
The company submitted accounts covering nine months up to the end of June following a decision by the local board to change the accounting period for the business.
There is only scant disclosure about the operating performance of different product lines in the accounts and absolutely no references or guidance about any contributions from Apple Pay.
Apple’s local arm – Apple Pty Ltd – posted a 2022 net profit of A$271.5 million from revenue of $9.24 billion.
This was more or less in line with a 12 month result in 2021 of $319.5 million from total revenue of $11.1 billion.
According to the Australian arm’s profit statement, Apple paid income tax of $119.1 million to the ATO for the nine months to the end of June this year.