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Apple Pay: a $1 billion per month potential turnover

Source: Roy Morgan Single Source (Australia), October 2014 – September 2015 (n=50,279).

The recently announced launch of Apple Pay in Australia, exclusively for American Express issued credit card holders, represents a good strategic fit, because AMEX cardholders have the highest ownership of iPhones compared to Mastercard, VISA and all the major banks. They also have the highest spend on credit cards overall, well ahead of their major card competitors. With 221,000 holders of AMEX-issued credit cards owning an iPhone and spending an average of $4,560 across all their credit cards each month, the potential turnover on Apple Pay is more than $1billion per month.

These are the latest findings from the Roy Morgan Single Source survey of over 50,000 people pa.


AMEX card-holders lead in iPhone ownership

Over half (52%) of AMEX credit card holders (non-bank issued) have an iPhone, well ahead of Mastercard holders (36%) and VISA (35%). ING Direct leads the banks in iPhone ownership with 47% but the big four banks are well behind, with Westpac and ANZ on 36%, followed by NAB (35%) and CBA (34%).

Bank and Card Customers with an iPhone

Source: Roy Morgan Single Source (Australia), October 2014 – September 2015 (n=50,279). * Non-bank-issued

As would be expected given the higher incidence of iPhones, AMEX card-holders are nearly twice as likely as other card-holders to have made a purchase using a mobile phone. This will obviously make them more likely to take up Apple Pay.

At this stage over 80,000 AMEX card-holders own an iPhone 6, the only model capable of accessing Apple Pay. This is likely to grow rapidly, given that another 48,000 AMEX card-holders intend to buy or upgrade a mobile phone within the next 12 months.


AMEX card-holders are the big spenders

Holders of AMEX cards (non-bank issued) spend an average of $4,560 per month on cards overall, well ahead of Mastercard ($2,870) and VISA ($2,940).

Average monthly spend on Credit Cards

Source: Roy Morgan Single Source (Australia), October 2014 – September 2015 (n=50,279). * Non-bank-issued

The challenge for AMEX is to capture more of their cardholders’ spend, which currently amounts to $1,980 per month or around 43% of their total card spend. The average monthly spend on Mastercard by comparison is $1,710 (60% of potential) and average spend on VISA is $1,790 (61% of potential).

Norman Morris, Industry Communications Director, Roy Morgan Research, says:

“There is an obvious synergy between the type of high-end, affluent customer who holds an AMEX card and Apple’s customers, who tend to be early adopters of the latest technology. This is evident in the fact that AMEX-issued card-holders have the highest iPhone ownership of all the major banks’ customers and other cardholders.

“Another positive factor for the potential success of Apple Pay is that AMEX card-holders are already more familiar than the general population with using their phone to make purchases, doing so at twice the overall population level.

“Although AMEX card-holders are much bigger spenders on cards overall than other card-holders, the full potential of business likely to be conducted on Apple Pay will depend on achieving a greater share of their spend. At present, AMEX is only gaining 43% of their customers’ card spend, leaving a big opportunity for growth from existing card-holders. It will also be interesting to see how many AMEX customers with their cards issued by a bank might drop their cards for one that can use Apple Pay.”


For comments or more information please contact:
Suela Qemal, General Manager - Financial Services & Consulting
Office: +61 (3) 9629 6888
Suela.Qemal@roymorgan.com


About Roy Morgan

Roy Morgan is the largest independent Australian research company, with offices throughout Australia, as well as in Indonesia, the United States and the United Kingdom. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan has over 70 years’ experience in collecting objective, independent information on consumers.

Margin of Error

The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.

Sample Size

Percentage Estimate

40%-60%

25% or 75%

10% or 90%

5% or 95%

1,000

±3.0

±2.7

±1.9

±1.3

5,000

±1.4

±1.2

±0.8

±0.6

7,500

±1.1

±1.0

±0.7

±0.5

10,000

±1.0

±0.9

±0.6

±0.4

20,000

±0.7

±0.6

±0.4

±0.3

50,000

±0.4

±0.4

±0.3

±0.2