Will Tim Cook’s Apple Pay Push Slow Bitcoin Adoption? (Op-Ed)

The California Macintosh and iPhone maker is in the process of ramping up its proprietary financial services technology and increasing Apple’s lending to iPhone users of Apple Pay.

This is according to a Bloomberg report from earlier this week.

The Cupertino high-tech giant sounds serious about the project, dubbing the effort “Breakout” and seeking to replace its fintech partners with in-house solutions and infrastructure to bolster payments processing, credit checks, and other financial services.

Apple CEO Tim Cook Eyes Apple Pay Growth

That could scoop up a tidy sum of future profits from payments alone, as well as greater user enrollment into Apple’s “walled garden” of native apps and products. According to The Verge, there are over 1 billion active users of Apple iPhones worldwide.

Apple Pay’s current fintech service vendors, CoreCard (CCRD.N) and Green Dot (GDOT.N), who support the company’s credit and peer-to-peer remittances products, saw their shares drop steeply after the news broke Wednesday, 12% and 5% respectively.

The move by the Tim Cook-led computer and software maker is a classic Steve Jobs and returns Apple Pay to its traditional ethos of strict in-house command and control over all aspects of its product offerings.

While Apple Pay is a conventional digital wallet along the lines of PayPal, utilizing the company’s enormous cash reserves of USD and liquid USD equivalent securities to provide liquidity and backing for a proprietary database of payments kept by the company’s internal servers— it may still take a bite out of the peer-to-peer payments markets that are powered by cryptocurrency blockchains like Bitcoin (BTC).

According to a 2021 McKinsey Global Payments Report, revenues from the payments industry globally topped $1.9 trillion in 2020. Writing for Reuters Thursday, Liam Proud averred: “Digital upstarts like Affirm (AFRM.O) and Jack Dorsey’s Block (SQ.N) should be on high alert. Lenders like Goldman Sachs (GS.N), however, have less to fear.”

The Competition Could Speed Blockchain Wallet Development

Since purchasing Square Payments and turning it into CashApp (and recently renaming it Block), Dorsey’s fintech company has been steamrolling through the payments space and hastening crypto disruption with its embrace of the Bitcoin blockchain for users to send payments and save their money in bitcoin. Despite stellar growth in recent years, the company’s Q4 2021 profits blasted higher by some 47% for the quarter.

Nevertheless, Apple’s Breakout project to boost Apple Pay usage on its one billion devices is a direct competitor with the other digital wallets, including the blockchain-based crypto wallets and others like CashApp that offer seamless cryptocurrency integrations powered by networks like Bitcoin.

Will it slow blockchain adoption?

It could – here or there, especially among consumers who use the iPhone and Apple Pay already and have not yet adopted cryptocurrency.

But it could also spur faster development of the technical requirements, business partnerships, and commercial marketing that would hasten market adoption of the blockchain for payments and lending.