Apple Pay dominates merchant mindshare for contactless payments, survey finds

AppleInsider

A new poll of merchant processing partners has found that Apple Pay is by far the most desired tap-to-pay method, easily exceeding demand for rival services like Android Pay, PayPal and Samsung Pay.

Investment firm Piper Jaffray polled 507 value added resellers and independent software vendors, and found that 44 percent of their point-of-sale merchant customers are already using or have requested more information about NFC payment terminals.

Among those interested in contactless payment solutions, 67 percent of merchants expressed a desire to support Apple Pay. That was by far the most popular option among merchants, the poll found, easily besting second-place finisher Android Pay.

Coming in third with just 8 percent was PayPal, while only 7 percent of merchants expressed a desire to support Samsung Pay.

"We believe it is telling that PayPal, who has been the leader in digital payments, so significantly under-indexed Apple Pay and Android Pay," analyst Gene Munster wrote in a note to investors.

While the survey reflects poorly on PayPal, Munster said it's an encouraging sign not only for Apple, but for digital wallets in general.

Still, he doesn't expect Apple Pay to greatly impact the company's bottom line -- Piper Jaffray's estimates call for less than 1 percent of Apple's revenue and earnings in 2017 to be Apple Pay related.

"Apple Pay's significance is an engagement tool, which longer term is a must-have for any successful phone as cash slowly goes away," Munster said.

In the U.S., Apple Pay is supported by more than 1,000 card issuers, and it is accepted at more than 2 million point-of-sale locations. Tap-to-pay support with Apple Pay can be found in the iPhone 6 and iPhone 6s series, as well as Apple Watch, and is expected to expand to the new 4-inch "iPhone SE" this month.

igorsky

Samsung...always left sitting at the dance.

jbdragon

igorsky said:

Samsung...always left sitting at the dance.

Samesung has been trying to offer it's own services to make money after the sale. The problem is they don't own Android, Google does, and most everyone would rather use Google's services, the Exception seems to be CHINA where they're doing their own thing. Samesung Pay will be yet another loser. Their profits like everyone else building Android phones will continue to drop to nothing. Really the only winner with Android is Google!!! They demand their services front and center and don't care who is making the phones or if they make any money doing it. Google still wins. On the other hand, if all these Merchants are aware of Apple Pay, why aren't merchants supporting NFC and Apple Pay? That's really the biggest issue currently in the U.S. It's lack of support. Most of the banks are now on board. Everyone is waiting for the ability to use it everywhere now and these same merchants are dragging their feet.

mike1

Was pleasantly surprised to find that a local Mom and Pop grocery store that I shop at regularly installed a new POS system that accepted tap-to-pay from my phone. There was no Apple Pay logo on the terminal but it went through fine and I didn't need to enter a PIN for my debit card. :-)

studiomusic

My local store just changed out all of their POS systems with ones that don't accept any wireless payments. They said the wireless part was messing up the other parts. Sure.

lkrupp

Just more evidence that iOS owners actually use their devices compared to the competition. iOS dominates web traffic, app purchases, now NFC payments. Even though iOS has a “paltry” ~14% market share worldwide it still grabs the most profit, the most sophisticated and affluent users, app developers who release iOS first and Android later or never. I vividly remember the debut of Apple Pay. The usual suspects here pounced upon the fact that Google Wallet had been around “for years” before Apple Pay. Trouble was most Android users had no clue it existed let alone used it. It took Apple Pay for NFC to get any traction with the general public. It always takes Apple for any new technology to get traction with the masses. Techies live in their closed little universes completely isolated from the real world and how real people use technology.

floz

lkrupp said:

iOS dominates web traffic

not anymore sadly : https://mobiforge.com/news-comment/shrinking-feeling-apple-losing-dominance-global-web-traffic

bulldogs

jbdragon said:

igorsky said:

Samsung...always left sitting at the dance.

Samesung has been trying to offer it's own services to make money after the sale. The problem is they don't own Android, Google does, and most everyone would rather use Google's services, the Exception seems to be CHINA where they're doing their own thing. Samesung Pay will be yet another loser. Their profits like everyone else building Android phones will continue to drop to nothing. Really the only winner with Android is Google!!! They demand their services front and center and don't care who is making the phones or if they make any money doing it. Google still wins. On the other hand, if all these Merchants are aware of Apple Pay, why aren't merchants supporting NFC and Apple Pay? That's really the biggest issue currently in the U.S. It's lack of support. Most of the banks are now on board. Everyone is waiting for the ability to use it everywhere now and these same merchants are dragging their feet.

0. Calling Samsung "Samesung" in this space is hilarious. Samsung phones supported NFC payments back in 2011 along with all other Android NFC-enabled phones. Apple devices didn't even add NFC, let alone mobile payment ability, until 2014. Also, Samsung's solution is different - and superior - because it includes MST in addition to NFC, meaning that it can be used at any location that supports electronic credit card purchases.
 
1. Regardless of whether they prefer to support Apple Pay, Android Pay, Samsung Pay or LG Pay, if they enable their NFC, they will support all 4. And if they have credit card stripe readers, they will support Samsung Pay because of their MST reader tech. 

2. No one, including Apple, is making much money off mobile payments. The purpose of offering mobile payments is ecosystem lock-in.

3. "Their profits like everyone else building Android phones will continue to drop to nothing." Except their profits have already stopped dropping, as have profits for most other hardware vendors except HTC and Sony. Many other Android manufacturers also make money by selling components to their competition - which includes Apple - and also a whole lot making accessories. As far as services ... well there are more than apps! Xiaomi, Huawei and others are also mobile, Internet and even streaming TV/music providers. They bundle those with the Android tablets and phones and make a ton of money. Xiaomi and Huawei are even considering expanding this business model to foreign countries, initially some parts of Asia, Africa and even Europe where the devices will be sold at cost in order for them to make the real money getting the users online and having them rent movies. 

Sorry, but if Android was so unprofitable, more companies would have abandoned it by now. Instead, the only company that has - not counting those who merely dabbled a bit like Pyle and Philips - is HP (and with them one should note that they never made phones, only tablets) and more and more new companies launch selling Android devices each year.

chasm

Ironically, I use Apple Pay every single day at merchants all over town -- in Canada. I have a supported US card, an Apple Watch, and nearly every merchant up here has had a "contactless" card reader for years. IME, it sometimes takes a moment or a second try to get it to read, but even when that happens it is considerably quicker than fishing out the wallet, selecting the card, inserting the card (everyone uses chip-and-PIN up here), waiting for PIN entry, entering PIN, waiting for approval, taking the card out and putting it back in the wallet, and returning the wallet to your pocket. As in (most of the time) BOOP you're done, or at worst (put Watch near terminal, wait a second, not working, try again, BOOP).

nolamacguy

bulldogs said:

jbdragon said:

Samesung has been trying to offer it's own services to make money after the sale. The problem is they don't own Android, Google does, and most everyone would rather use Google's services, the Exception seems to be CHINA where they're doing their own thing. Samesung Pay will be yet another loser. Their profits like everyone else building Android phones will continue to drop to nothing. Really the only winner with Android is Google!!! They demand their services front and center and don't care who is making the phones or if they make any money doing it. Google still wins. On the other hand, if all these Merchants are aware of Apple Pay, why aren't merchants supporting NFC and Apple Pay? That's really the biggest issue currently in the U.S. It's lack of support. Most of the banks are now on board. Everyone is waiting for the ability to use it everywhere now and these same merchants are dragging their feet.

0. Calling Samsung "Samesung" in this space is hilarious. Samsung phones supported NFC payments back in 2011 

as long as their phone designs are copies of Apple's, they'll remain "Samesung". sorry it hurts, bro.

bulldogs

This post is funny. Vendors can prefer Apple Pay to Samsung Pay, Android Pay and the competition all they want. That doesn't change the reality that by enabling support for Apple Pay, they - in nearly all cases - will automatically support Android Pay, LG Pay, Paypal and everyone else who offers an NFC payments solution. Oh yes: and if they support electronic credit card payments, they already support Samsung Pay whether they want to or not.

Second, this artfully ignores the real story: Android Pay usage has caught up with Apple Pay usage. Despite Apple Pay being introduced nearly a year earlier, receiving much more advertising and media fanfare, and being supported by far more financial institutions, both saw the same transaction rates in physical stores: 8%.

http://www.luxurydaily.com/android-pay-apple-pay-reach-parity-as-mobile-pay-adoption-grows-report/

Before you reply that Android has a larger market share ... these are only stats for America, where iOS and Android market share is nearly equal. (In addition, Android Pay will not launch in its first foreign market, the U.K., until later this month.) So these vendors may prefer supporting Apple Pay, but they will wind up supporting both solutions, and in about equal volumes. 

cali

And this is with them doing a bad job. I've never seen a single ApplePay sticker they issued out and retailers were quick to add the little green robot next to the Apple months late,most retailers were clueless and for the first few months posted signs saying "Phone payments accepted"(YES, I've actually seen this at huge chain stores like Safeway).

When ApplePay released I suggested Apple subsidize POS system with the ApplePay logo ingrained on them(or iPads with built in NFC) to retailers in exchange for mindshare and ApplePay acceptance.

ericthehalfbee

bulldogs said:

This post is funny. Vendors can prefer Apple Pay to Samsung Pay, Android Pay and the competition all they want. That doesn't change the reality that by enabling support for Apple Pay, they - in nearly all cases - will automatically support Android Pay, LG Pay, Paypal and everyone else who offers an NFC payments solution. Oh yes: and if they support electronic credit card payments, they already support Samsung Pay whether they want to or not.

Second, this artfully ignores the real story: Android Pay usage has caught up with Apple Pay usage. Despite Apple Pay being introduced nearly a year earlier, receiving much more advertising and media fanfare, and being supported by far more financial institutions, both saw the same transaction rates in physical stores: 8%.

http://www.luxurydaily.com/android-pay-apple-pay-reach-parity-as-mobile-pay-adoption-grows-report/

Before you reply that Android has a larger market share ... these are only stats for America, where iOS and Android market share is nearly equal. (In addition, Android Pay will not launch in its first foreign market, the U.K., until later this month.) So these vendors may prefer supporting Apple Pay, but they will wind up supporting both solutions, and in about equal volumes. 

What a load of crap and lies.

"by enabling support for Apple Pay....."

Seems you forgot that the banks have to update their software BEFORE you can use Apple Pay or Samsung Pay. Samsung is at 60 banks to Apple at 1,000. Perhaps you might want to educate yourself on how these systems work before opening your mouth. Having an NFC tetminal does not mean your system of choice automatically works.

IBM, Adobe and Custora all show iOS with around 75% of online shopping with Android at 25%. And you come up with some ridiculous no-name study to imply Android Pay is at parity with Apple Pay? Is the bridge you live under on the river denial by any chance?

patsu

bulldogs said:

This post is funny. Vendors can prefer Apple Pay to Samsung Pay, Android Pay and the competition all they want. That doesn't change the reality that by enabling support for Apple Pay, they - in nearly all cases - will automatically support Android Pay, LG Pay, Paypal and everyone else who offers an NFC payments solution. Oh yes: and if they support electronic credit card payments, they already support Samsung Pay whether they want to or not.

Second, this artfully ignores the real story: Android Pay usage has caught up with Apple Pay usage. Despite Apple Pay being introduced nearly a year earlier, receiving much more advertising and media fanfare, and being supported by far more financial institutions, both saw the same transaction rates in physical stores: 8%.

http://www.luxurydaily.com/android-pay-apple-pay-reach-parity-as-mobile-pay-adoption-grows-report/

Before you reply that Android has a larger market share ... these are only stats for America, where iOS and Android market share is nearly equal. (In addition, Android Pay will not launch in its first foreign market, the U.K., until later this month.) So these vendors may prefer supporting Apple Pay, but they will wind up supporting both solutions, and in about equal volumes. 

That article is wrong. By bringing in Softcard and saying it increased Android Pay momentum, they are lumping all the disarrayed payment mechanisms with varying security level together and count them as "Android Pay". So they are counting all the major wallet solutions, including the "no security" card emulation mode, available on Android to-date. Those old wallet mechanisms had more merchant (but less secure) penetration because they started much earlier than Apple Pay, and doesn't require the new tokenization set up.

Apple Pay started later and only refers to one consistent tokenization method.
However, it is the standard going forward internationally from US to China. All those old payment mechanisms will linger but will not grow anymore. They are outdated and leaky.

cnocbui

chasm said:

Ironically, I use Apple Pay every single day at merchants all over town -- in Canada. I have a supported US card, an Apple Watch, and nearly every merchant up here has had a "contactless" card reader for years. IME, it sometimes takes a moment or a second try to get it to read, but even when that happens it is considerably quicker than fishing out the wallet, selecting the card, inserting the card (everyone uses chip-and-PIN up here), waiting for PIN entry, entering PIN, waiting for approval, taking the card out and putting it back in the wallet, and returning the wallet to your pocket. As in (most of the time) BOOP you're done, or at worst (put Watch near terminal, wait a second, not working, try again, BOOP).

So you have NFC payment terminals but no NFC cards, just chip and PIN?

boltsfan17

bulldogs said:

jbdragon said:

Samesung has been trying to offer it's own services to make money after the sale. The problem is they don't own Android, Google does, and most everyone would rather use Google's services, the Exception seems to be CHINA where they're doing their own thing. Samesung Pay will be yet another loser. Their profits like everyone else building Android phones will continue to drop to nothing. Really the only winner with Android is Google!!! They demand their services front and center and don't care who is making the phones or if they make any money doing it. Google still wins. On the other hand, if all these Merchants are aware of Apple Pay, why aren't merchants supporting NFC and Apple Pay? That's really the biggest issue currently in the U.S. It's lack of support. Most of the banks are now on board. Everyone is waiting for the ability to use it everywhere now and these same merchants are dragging their feet.

0. Calling Samsung "Samesung" in this space is hilarious. Samsung phones supported NFC payments back in 2011 along with all other Android NFC-enabled phones. Apple devices didn't even add NFC, let alone mobile payment ability, until 2014. Also, Samsung's solution is different - and superior - because it includes MST in addition to NFC, meaning that it can be used at any location that supports electronic credit card purchases.
 

Supporting is one thing, usefulness is another. NFC was useless back in 2011. It's just like Samsung phones first had LTE. Who cares if you can't use it. Apple is smart by adding features to their iPhone when they are actually useful for consumers. It's actually hilarious you are touting MST as being superior. MST is old dated technology that's not very secure. Why would you tout a feature that's becoming obsolete? Good luck using MST outside of the U.S. Even here in the U.S., magnetic stripe readers are slowly becoming obsolete. 

sirlance99

cali said:

And this is with them doing a bad job. I've never seen a single ApplePay sticker they issued out and retailers were quick to add the little green robot next to the Apple months late,most retailers were clueless and for the first few months posted signs saying "Phone payments accepted"(YES, I've actually seen this at huge chain stores like Safeway).

When ApplePay released I suggested Apple subsidize POS system with the ApplePay logo ingrained on them(or iPads with built in NFC) to retailers in exchange for mindshare and ApplePay acceptance.

Why would Apple subsidize a POS system when it would have to work with all forms of NFC payments? 

ericthehalfbee

cnocbui said:

chasm said:

Ironically, I use Apple Pay every single day at merchants all over town -- in Canada. I have a supported US card, an Apple Watch, and nearly every merchant up here has had a "contactless" card reader for years. IME, it sometimes takes a moment or a second try to get it to read, but even when that happens it is considerably quicker than fishing out the wallet, selecting the card, inserting the card (everyone uses chip-and-PIN up here), waiting for PIN entry, entering PIN, waiting for approval, taking the card out and putting it back in the wallet, and returning the wallet to your pocket. As in (most of the time) BOOP you're done, or at worst (put Watch near terminal, wait a second, not working, try again, BOOP).

So you have NFC payment terminals but no NFC cards, just chip and PIN?

No, in Canada we have chip/PIN cards that ALSO have NFC/contactless. I tap my cards so often that now I get pissed when I have to insert the chip (since I'm so used to tapping). Only time you're required to insert the chip card is for large $$$ purchases, since tapping has a limit (my card is $100 per day).

brucemc

Certainly hope Apple Pay adoption in other countries accelerates.  From those who have an AW, many report that using Apple Pay from it is their favourite feature.  More Apple Pay, with appropriate advertising and growing awareness, is a strong positive for AW sales.

cali

sirlance99 said:

cali said:

And this is with them doing a bad job. I've never seen a single ApplePay sticker they issued out and retailers were quick to add the little green robot next to the Apple months late,most retailers were clueless and for the first few months posted signs saying "Phone payments accepted"(YES, I've actually seen this at huge chain stores like Safeway).

When ApplePay released I suggested Apple subsidize POS system with the ApplePay logo ingrained on them(or iPads with built in NFC) to retailers in exchange for mindshare and ApplePay acceptance.

Why would Apple subsidize a POS system when it would have to work with all forms of NFC payments? 

For the reasons I stated. I knew the copycats would come rushing and it's starting to make Apple seem like an equal payment system when it's much more than them.

sirlance99

cali said:

sirlance99 said:

Why would Apple subsidize a POS system when it would have to work with all forms of NFC payments? 

For the reasons I stated. I knew the copycats would come rushing and it's starting to make Apple seem like an equal payment system when it's much more than them.

It'll take years before it's common place and on top of that it'll be just another form of payment along with all the others like it is today with the different types of credit cards.