Tim Cook: 2015 will be the year of Apple Pay

Apple says a total of 750 banks and credit unions are now working with the iPhone-centric payment service.

Donna Tam Staff Writer / News
Donna Tam covers Amazon and other fun stuff for CNET News. She is a San Francisco native who enjoys feasting, merrymaking, checking her Gmail and reading her Kindle.
Donna Tam
2 min read

Apple Pay is on the move, now supported by more than 750 banks and credit unions. Jason Cipriani/CNET

Apple Pay has become the most popular payment option of its kind, Apple CEO Tim Cook said during the company's earnings call Tuesday.

The service continues to add financial institutions to its roster -- it's now up to 750 banks and credit unions -- and makes up more than $2 out of every $3 spent on purchases using contactless payments, according to Cook. (Contactless payments cover any devices -- smart-cards included -- that make payments using a radio frequency.) Cook also highlighted Apple Pay's rollout to over 200,000 payment kiosks, including parking meters, laundry machines and vending machines, through a partnership with USA Technologies announced earlier in the day.

"We are more confident than ever that 2015 will be the year of Apple Pay," he said.

The service went live in October with about 500 financial-institution partners and 220,000 merchants.

Apple unveiled Apple Pay at the launch of the iPhone 6 and iPhone 6 Plus in September, and like its competitors, it wants to establish a digital replacement for the wallet. The similarly intended Google Wallet also lets consumers tap and pay for items in a store, while wireless carriers have joined together to support a service called Softcard.

But even though people have been able to purchase digital goods, like ringtones, through text messages for years, nothing has been able to convince shoppers to ditch their traditional wallets.

Apple thinks Apple Pay could be the catalyst for consumers. The service works by allowing users to simply tap an iPhone to a payment terminal and then touch their phone's fingerprint sensor to authorize a purchase. Both the devices and the terminals must have near-field communication (NFC) chips that store payment credentials -- something that limits the service to the new iPhone 6 and the iPhone 6 Plus. The service will also work with Apple's highly anticipated smartwatch. Cook mentioned during Tuesday's call that the watch would start shipping in April.

Apple Pay had opposition from a large group of merchants early on. Some members of the Merchant Customer Exchange, or MCX -- a consortium of retailers led by Walmart -- decided to disable consumers' ability to use Apple Pay , in anticipation of the launch of MCX's alternative payments service. Cook dismissed the event as "a skirmish."

So far, the scuffle hasn't slowed down enthusiasm for Apple Pay, according to Cook's anecdotes. He highlighted two key merchants during the call. The Panera Bread restaurant chain, one of Apple's earliest partners for the mobile payments service, said Apple Pay transactions make up 80 percent of the chain's mobile transactions. For grocer Whole Foods, another partner, mobile transactions have gone up by 400 percent since Apple Pay became available three months ago. It's unclear how popular mobile payments were previously for either merchant.

Update, 3:10 p.m. PT: Adds background and information.