Apple CEO Tim Cook just revealed that the company has 400 million active accounts with credit cards registered for its online stores—in other words, iTunes and the App Store.That’s more than PayPal, which has 110 million active accounts (out of 232 million total), and Amazon.com, which reports having 152 million customer accounts.
Now, that doesn’t make Apple a threat to Amazon.com or PayPal in retail. As payments expert Brian Roemmele recently pointed out on Quora, Apple’s payments infrastructure is geared around selling digital goods like music and apps.
To handle payments for physical goods, Apple would need to develop a massive customer-service infrastructure—thousands of people in call centres handling disputes, chargebacks, and other problems that come with processing such payments.
Roemmele also addresses a big complaint app developers have on the 30 per cent cut Apple takes on app purchases. For a 99-cent app—still the most popular price point, though the average price is rising—Apple pays most of that to payment processors. (PayPal and Amazon aren’t much better for small payments. And while consumers can link their PayPal accounts to their Apple accounts, those payments still go through Apple. App developers selling on the App Store can’t accept payments directly via PayPal.)
Bottom line: When it comes to mobile payments for anything made up of bits, Apple has a huge advantage in its giant pool of customers and the ease with which they can pay.
And it’s using that advantage to protect and grow its mobile franchise—by doing a far better job of putting money in app developers’ pockets than the likes of Google or Facebook.