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New data shows Apple Pay growing extremely fast, mostly hurting PayPal - analyst

November 29, 2022 7:16 AM EST
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According to the new data on holiday eCommerce trends, released by Salesforce and analyzed by Deutsche Bank analysts led by Bryan Keane, Apple’s (NASDAQ: AAPL) Apple Pay is quickly taking market share from rivals at a rapid pace.

The data, collected from over 1.5 billion shoppers globally, shows U.S. eCommerce has grown about 2% year-over-year since November 1. This is in contrast to global eCommerce, which has fallen by -2% YoY.

“Breaking out the spending trends by payment type, Salesforce’s new data shows Apple Pay growing at an extremely rapid pace growing November MTD ~52% Y/Y globally and ~59% Y/Y in the US while, over the same period, PYPL adoption has fallen -8% Y/Y globally and -4% Y/Y in the US,” Keane explained in a client note.

Overall, PayPal (NASDAQ: PYPL) remains “a much larger payment type” with a c16% of global market share (c15% of U.S. eCommerce payments) while Apple Pay’s market share is around 5% globally and about 6% in the U.S.

“Of particular interest, there appears to be material regional variations in online consumer spending with European volumes coming in much weaker than the US with different share shifts within countries,” Keane added.

For instance, Apple Pay adoption month-to-date (MTD) is c113% in Germany and c125% in France YoY. On the other hand, PayPal has seen a -19% YoY decline in the U.K. and Ireland.

“Given PYPL’s material exposure to the UK (~7% of net revenues) and the EU (~17% of net revenues), the slowdown in these regions could end up offsetting any strength seen in the US when it comes time to report 4Q22 results… We continue to expect PYPL will face the steepest competition in the coming months and years from Apple Pay, a belief that has only been strengthened after our review of Salesforce’s holiday spending data,” Keane concluded.

By Senad Karaahmetovic



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Deutsche Bank, Senad Karaahmetovic