We have written and given presentations on a number of occasions about how West Coast tech firms such as Apple, Amazon, Google, Facebook etc seem to be looking to ‘take a Byte out of the Big Apple’. All these tech bemouths have been busy building their own payment platforms, rivalling those which many of New York’s financial services firms have offered historically.
Some believe that Apple Pay, in the US alone, is generating $1billion of revenue p.a. and over 500 million customers globally Given how it is growing, as the world increasingly turns its back on cash and embraces digital payments, its outlook would appear to be very positive. Bearing in mind that, at $108 billion, PayPal is valued over 2.5 times the valuation of Goldman Sachs’ $130billion - so what would Apple Pay, with more clients than Paypal, be valued at? Will Apple Pay, Google Pay Samsung Pay, Amazon Pay etc be spun out too, in the same way Alibaba in China spun out AliPay to create Ant Financial in 2014? If big tech firms are to see their profitability challenged by the G7 governments as they scramble to repair their balance of payment post COVID-19, how long will it be for those astute accountants and tax advisors to the tech giants search for new ways to, once again, minimise the tech giants’ tax?
Apple Pay growth of users Paypal growth of users
Source: Statista.com Source: Statista.com
As Hayden Jones, from PwC, pointed out in last week’s Digital Bytes, it is digital currencies in the form of a stablecoin which offer considerable attractions to treasury departments of multinational firms. Digital currencies enable companies to move money around the globe, by-passing correspondent banks and offering real-time cash management. With comments such as: “So-called stable coins (cryptocurrencies pegged to other assets) need to be closely monitored. The outlook for stable coins as a means of payment … [has] It caused a lot of problems. It is imperative to ask difficult and appropriate questions about the future of these new forms of digital money” coming from the governor of the Bank of England, Andrew Baily, is this a sign that stablecoins are...