Study: Apple Pay has more Gen X users than Millennials, but adoption slowing

Posted:
in iPhone edited October 2015
A study from Phoenix Marketing International says Apple Pay is still picking up users one year after launch, and recently saw a bump in usage rates from Gen X card holders, but overall growth is quickly reaching a plateau.




Speaking at the Money 20/20 convention in Las Vegas this week, Greg Weed, Phoenix Marketing's director of Card Performance Research, said Apple Pay is now being used by 14 percent of households with eligible credit cards. That statistic is impressive for a year-old fledgling payments service, but Weed's analysis shows a steep decline in adoption going into year two.

According to statistics shared with AppleInsider, Apple Pay reached 11 percent of credit card households four months after its release, meaning adoption grew three points since February. Phoenix Marketing sampled the numbers from a pool of 15,000 consumers polled over the past year.

While Apple Pay enjoyed little growth over the past few months, the service did see an uptick in usage rates from Gen Xers, a demographic defined as consumers aged 33 to 48. Initially, only 15 percent of Gen Xers signed up for Apple Pay actively used the service, Weed found, but that number that has since increased to 23 percent as of September.

Overall, Gen Xers accounted for 48 percent of all Apple Pay users heading into quarter four, with Millennials aged 18 to 32 making up a bulk of the remainder at 42 percent. Millennials also exhibited the highest usage rates with some 26 percent of users turning to Apple's service for their payment needs.

Weed says credit cards dominate Apple Pay and account for 86 percent of all cards linked to the service. Debit cards come in second with a 49 percent share, while prepaid cards account for another 22 percent.

In September, 79 percent of Apple Pay users said they completely replaced contactless plastic credit and debit cards with iPhone and Apple Watch, up from 51 percent in July and 53 percent in February.

Apple continues to ink deals with card issuing institutions in a bid to widen its accessible customer base, most recently adding 75 U.S. banks to its roster of partners. The service is currently limited to U.S. and UK customers, though availability is expected to debut in Canada and other locales soon.
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Comments

  • Reply 1 of 49
    Until you get more major retailers on board it's going to have issues. A lot of the list is niche.
  • Reply 2 of 49
    john.bjohn.b Posts: 2,717member
    It would help if I had more places I could use it.
  • Reply 3 of 49
    rob53rob53 Posts: 2,007member
    Get Home Depot and Costco on board and I'd use it for 80% of my purchases. Until then I rarely shop anywhere where they have ApplePay available. I have found registers where the cashier didn't even know they took ApplePay, which shows how little retailers care about it.
  • Reply 4 of 49
    Trader Joe's is about the only place where I can use it, and it is flakey. On the plus side though, it is dramatically faster than the chip authentication. This is ultimately what will increase use for me-- as acceptance improves anyway.
  • Reply 5 of 49
    nagrommenagromme Posts: 2,834member
    Get those NFC-ready registers everywhere (thought it would have happened by now!) and THEN we can talk about whether there's a meaningful "plateau."

    No need for retailers to "support" Apple Pay... they just need modern payment terminals period, and NFC will work.
  • Reply 6 of 49
    Well it's not slowed down from lack of trying. 2-3 times a day I have to ask vendors "when are you Turing on Apple Pay?'" so it's not from lack of use. Everyone tells me "hoping to have it soon". Same here we do most of our shopping between Costco and target. Plus everyone has to grocery shop and buy gas. You'd think they would be the first. Hell I'd go inside if the gas offered Apple Pay but only at the register. Plus I see a LOT of movies. Gas, groceries, movies this is in real life what people use. They should have been the first on board.

    One good thing if it's taking this long for something this secure and this easy to use then these others don't stand a chance.
  • Reply 7 of 49
    maxitmaxit Posts: 212member
    Until you get more major retailers on board it's going to have issues. A lot of the list is niche.

    john.b wrote: »
    It would help if I had more places I could use it.

    It works both ways: number of available store would be higher if more potential buyers would be available...
    Apple need to expand into the European market, Canada and Japan.
  • Reply 8 of 49
    "Weed says credit cards dominate Apple Pay and account for 86 percent of all cards linked to the service. Debit cards come in second with a 49 percent share, while prepaid cards account for another 22 percent."

    Something wrong with the maths here!!
  • Reply 9 of 49
    If only Australian Banks could get over themselves and their "innovation" but most importantly their interchange fees and deliver something their customer are crying out for. Australia would then punch above its population in terms of growth. The first bank that offers Apple Pay and I will happily shift my business. We have a household of Gen X, Gen Y and Millennials all eager to ditch our wallets. Every time we can't use Apple Pay we curse Australian banks for not getting the deal done!
  • Reply 10 of 49

    Barclays Bank in the UK is stubbornly holding out until next year to support Apple Pay, hoping it's own completely insecure ( think RFID sticker on the back of your phone!!) bPay system will gain some traction - which it won't.  Their arrogance is unsurprising and it's hurting customer convenience of course, not that they care - but I am sure there will be a fairly large uptick in UK usage once Barclays allow their credit and debit cards to be used.   I almost considered getting a new CC just to use Apple Pay, but cannot be arsed as we have contactless payments almost everywhere here now with our cards anyway.  I see the ApplePay logos in a lot of coffee shops and some major chain stores here.

  • Reply 11 of 49

    I know this is anecdotal, but I've found even when stores have new NFC/chip and pin terminals, they aren't used to people using them. I can't count the number of times I've been told "I didn't know you could do that" when I pay with ApplePay, either on my watch or my iPhone. That's been every where from Home Depot to visitor centers in national park areas to soft drinks vending machines. 

  • Reply 12 of 49

    Overall, Gen Xers accounted for 48 percent of all Apple Pay users heading into quarter four, with Millennials aged 18 to 32 making up a bulk of the remainder at 42 percent. Millennials also exhibited the highest usage rates with some 26 percent of users turning to Apple's service for their payment needs.

    What percentage of Gen X purchases consist of stuff they bought for millennials that can't get a job or a place of their own?

    Weed says credit cards dominate Apple Pay and account for 86 percent of all cards linked to the service. Debit cards come in second with a 49 percent share, while prepaid cards account for another 22 percent.

     

    86% + 49% + 22% > 100%

  • Reply 13 of 49

    I gotta carry my CCs with me anyways for the gas-pump, restaurants, coffee shops, and grocery stores. So what's the point?

    Initially, I began using it wherever possible, but now I don't even bother, I just reach for my wallet. 

  • Reply 14 of 49
    cnocbuicnocbui Posts: 3,613member
    Quote:

    Originally Posted by MaxIT View Post







    It works both ways: number of available store would be higher if more potential buyers would be available...

    Apple need to expand into the European market, Canada and Japan.



    Europe doesn't need it.  We have had NFC contactless payments for years.  For small transactions you just wave a card near the antennae to make and authorise a payment.  For larger amounts you have to type in a pin.  Neither of these is exactly slow or an inconvenience.

  • Reply 15 of 49
    rogifanrogifan Posts: 10,669member
    Until you get more major retailers on board it's going to have issues. A lot of the list is niche.

    I thought retailers would be forced to support NFC once they went chip and pin. The experience really sucks. You forget that your card is chip and pin so you swipe but the reader doesn't accept it. Then you have to stick your card in the other way and wait for it to be read. When I use my watch or my phone it takes literally two seconds.
  • Reply 16 of 49
    plovellplovell Posts: 795member
    I agree with the "lack of retailers" sentiment. At Home Depot, it works for Visa but not for MasterCard (go figure). The local grocery chain doesn't support it at all (nor are the chip-readers yet active). Costco doesn't (likewise - their terminals don't accept even their own co-branded Amex chip cards).
  • Reply 17 of 49
    wood1208wood1208 Posts: 1,883member
    Bigger problem is with retailers for their slow adoption of offering Apple Pay at check-out terminals. Take example of Kroger, who is big supermarket just recently adopted Chip technology. When I asked about Apple-Pay, manager said don't know and guess could take a while based on mandatory Chip tech adoption took so long for Kroger to adopt. So, problem is with retailers than consumers.
  • Reply 18 of 49
    The most significant obstacle in my neck of the woods (midwest) is training at the retailers that already have it. In most cases I have to walk the clerk through the process after they tell me "we don't take ApplePay". I simply point them to the sticker that says they do, walk them through the transaction and move on my way. It is a sad fact but I have not run into a place where they knew what the hell I was talking about. That was with the phone. Then the same places thought it was a totally different function once I stated to use my watch...It is crazy that large national chains have not figured out a simple training process like this.
  • Reply 19 of 49
    Quote:

    Originally Posted by williamh View Post

     

    86% + 49% + 22% > 100%




    LMFAO

  • Reply 20 of 49
    auxioauxio Posts: 1,975member
    Quote:

    Originally Posted by williamh View Post

     



    Weed says credit cards dominate Apple Pay and account for 86 percent of all cards linked to the service. Debit cards come in second with a 49 percent share, while prepaid cards account for another 22 percent.


    86% + 49% + 22% > 100%


     

    Sounds like his surname is bang on.

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