Cards supported by Apple Pay now reflect 90% of card transaction volume in US

On Tuesday Apple announced that ten new banks have agreed to work with Apple Pay to offer credit card support. With those additions, plus the recent additions of SunTrust, Barclaycard, and USAA banks, Apple Pay now accepts credit cards that represent about 90 percent of US credit card transaction volume, according to The New York Times.

That number bodes well for Apple and its nascent mobile payment platform that launched in October of this year. The service lets users buy goods at NFC-enabled terminals in brick-and-mortar stores, as well as pay with a single tap in the iTunes store and in other compatible apps.

The challenge for the adoption of mobile payments platforms like Apple Pay and Google Wallet, which debuted three years prior to Apple Pay’s announcement but failed to gain popular traction, is that the platform developers must build an entire ecosystem—from making sure banks will support the platform and let their users upload cards to it, to making sure that NFC-enabled terminals are in enough retailer checkout counters to make it worthwhile for customers to remember to pull out their phones to pay rather than their credit cards. Apple Pay gained a lot from the groundwork that Google Wallet laid when it pushed mobile payments years ago, and Google gained a lot from the work that MasterCard did with PayPass. Still, even the most bullish analysts currently predict that by the end of 2015, only 25 percent of retail terminals in the US will be NFC-enabled.

Apple is also working to bring new retailers into the fold to get a virtuous cycle going for mobile payments. According to the NYT, Apple also announced today that Staples would be accepting Apple Pay in its 1,400 US stores.

Apple Pay’s strategy with respect to partner banks has been decidedly different from that of Google Wallet. Although nothing is known officially about Apple’s deals with banks, it has been reported that at least some card issuers have agreed to pay Apple a cut of every transaction made through Apple Pay. Google Wallet, on the other hand, supports every US card (to our knowledge), but it is able to do so by setting up a virtual prepaid card for every customer which it fills up with money from the customer’s desired bank cards. With that scheme, Google likely loses a small amount of money with each transaction.