Apple Pay can become a billion dollar business by 2020

Horace Dediu runs the numbers on his blog Asymco and concludes:

These assumptions result in a cumulative revenue of over $1 billion by 2018 and a yearly run rate of $1 billion in revenue by 2020.

Although this is not a huge amount relative to Apple’s overall revenues, it’s important to note that these revenues are likely to go directly to earnings as there are negligible costs associated with the transactions that Apple needs to bear.

That's a nice 'little' business, one that many companies would love to have. That said, I see Apple Pay as more of a supporting character. It makes Apple devices even better, keeps Apple ahead of the competition, and supports Apple's high customer satisfaction levels. These all, of course, drive sales. And that is much more important to Apple than whatever profits Apple Pay generates.