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%).
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).
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.”