Apple Inc.'s Apple Pay will probably have an "immaterial" impact on Canadian bank earnings when it launches here, Cormark Securities Inc.'s Meny Grauman said.
The annual per-share earnings effect on Royal Bank of Canada, Toronto-Dominion Bank and the other four large lenders would fall an average of 5 basis points if Apple takes 5 per cent of payment volumes, Mr. Grauman said Thursday in a note to investors.
In the event Apple takes a 25-per-cent share of banks' payments volume, the six lenders would see annual profit pared by 0.23 per cent, he said. Estimates assume Apple's cut of interchange fees will be 15 basis points.
"Even at a 25 per cent adoption rate, which is a very tall order, the EPS impact on the large Canadian banks would still be immaterial to overall earnings," Mr. Grauman said.
Apple Pay, unveiled in the United States in October and introduced in Britain this month, isn't available yet in Canada, though Mr. Grauman and others in the industry anticipate Apple will start its service in Canada this year. Apple Pay has captured 1 per cent of the mobile payments processing market in the United States, Mr. Grauman said, citing data from ITG Market Research, with that share projected to grow to about 15 per cent by 2019.
Canada's banks have been investing in mobile payment systems, with Toronto-Dominion offering its UGO digital wallet and Canadian Imperial Bank of Commerce leading lenders in adopting the Suretap payments system backed by Canada's telecom companies. The bigger worry for banks is if firms like Apple and Google Inc., with its Android Pay, use this technology as a stepping stone to advance into other financial services, he said.