Apple Pay now accepted at 35% of US merchants, coming to Gap and more in 2017

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in iPhone
Headlining Re/code's Code Commerce conference in San Francisco on Tuesday, Apple Pay chief Jennifer Bailey said 35 percent of U.S. retailers now accept the company's fledgling payments service, a figure expected to grow substantially in 2017.


Apple Pay chief Jennifer Bailey onstage at Code Commerce. | Source: Re/code via Twitter


Given Apple Pay's current trajectory, Bailey estimates the current 35 percent adoption rate, which represents some 4 million locations, will grow to two out of every three retailers in the U.S. next year, reports The Verge. The uptick will be in large part due to participation from top retailers like Gap, which plans to accept Apple Pay at registers in the coming months.

Interestingly, Bailey believes the rise of EMV chip cards is helping to push consumers toward Apple Pay. In particular, customers are unsatisfied with the "dip to pay" method, a process that is confusing and cumbersome compared to Apple's touchless solution. At the same time, Apple is unwilling to tout NFC's benefits over EMV, at least not yet.

"Knocking EMV is not necessarily the way to go," Bailey said, adding, "I think it's to increase acceptance and work with great partners."

For now, Apple appears more concerned with building out a stable foundation than going toe-to-toe with EMV. The measured strategy is wise, especially considering retailers are being forced to upgrade their point-of-sale terminals to EMV-compatible hardware. In many cases, the updated card terminals also enable Apple Pay.

Apple's strategy appears to be working, as average monthly transactions are on the rise. In typical Apple fashion, Bailey declined to offer specific numbers.

Apple Pay is also seeing decent uptake beyond its domestic market. In Japan, for example, the payments service already has 1 million activated users just six weeks after launch, Bailey said. Integration with Japanese transit services, specifically Japan JR East's Suica transit card network, played a huge role in the Japan launch, and Apple intends to extend similar features to other markets.

As for Apple Pay's next act, Bailey hinted the product might one day replace physical wallets.

"Everything in your wallet we're thinking about," she said.
lostkiwi
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Comments

  • Reply 1 of 33
    apple ][apple ][ Posts: 8,360member
    Apple Pay works great! I use it all of the time now on my iPhone SE, whenever Apple Pay is available.

    I wish that it was available at my local grocery store for example, but it's not, at least not yet. That's probably the store that I visit most often, and things would be much easier with Apple Pay there.

    There I have to use a Credit Card and I have to sign my signature, using a stylus that barely works on a black & white screen that probably is 1995 tech.

    There should be an easy way for third parties to use Apple Pay, so that I could pay my weed dealer with Apple Pay, for example.
    watto_cobraGeorgeBMac
  • Reply 2 of 33
    SoliSoli Posts: 8,432member
    Wow! That percentage is higher than I expected it would be after just 2 years of a radical and brilliant system that requires both financial institutions, PoS HW makers, and retailers to all be involved (although it's really the financial institutions that have the heavy load as the others just need to support NFC).

    It's the tipping point when we stop saying, "Oh look, they accept Apple Pay," and instead say, "I can't believe they don't accept Apple Pay" to which look forward. I think we're another 2 years away from that, and when that happens we'll finally be able to start leaving our easily stolen cards at home on a regular basis.
    edited December 2016 bestkeptsecretlostkiwiRayz2016calipscooter63watto_cobrajony0
  • Reply 3 of 33
    I don't shop much. If I do, it's generally online. Chick-fil-a is the only place I've used it. Works pretty well. I hope more places take it so I can get by without my wallet sometimes. 
    lostkiwi
  • Reply 4 of 33
    Canadian here: I tried going walletless for 6 months earlier this year; an experiment that ultimately was unsuccessful. Sadly, our local grocery store doesn't have "tap to pay" POS terminals and I couldn't justify keeping loose cash or cards shoved into my pockets. Hoping the hint about replacing the physical wallet occurs sooner than later. 
  • Reply 5 of 33
    SoliSoli Posts: 8,432member
    Hoping the hint about replacing the physical wallet occurs sooner than later. 
    That depends on how you frame it. We had people on this very forum that bitched about Apple Pay not being ubiquitous right after it launched. For them, they felt Apple shouldn't have announced Apple Pay until everyone accepted it; I tried to explain that would be impossible as too many partners are involved in making this work and that it would take several years to reach a tipping point. Dumbfounding comments, to say the least.

    So I'd sooner rather than later if this 35% number is correct.
    edited December 2016 lostkiwiRayz2016calipscooter63GeorgeBMac
  • Reply 6 of 33
    Canadian here: I tried going walletless for 6 months earlier this year; an experiment that ultimately was unsuccessful. Sadly, our local grocery store doesn't have "tap to pay" POS terminals and I couldn't justify keeping loose cash or cards shoved into my pockets. Hoping the hint about replacing the physical wallet occurs sooner than later. 

    Where do you live? I'm in Vancouver and >90% of my purchases are Apple Pay (with my Watch). Safeway, Superstore, Save-On and No Frills grocery stores here all accept tap. I use it so often that I'm surprised when I go somewhere and see "no tap" written on a piece of tape on the terminal (which literally every place that doesn't have tap has, likely because they're sick of people trying to tap).

    IMO, Apple is making one HUGE mistake with Apple Pay - not advertising the security aspect of it. That's the best part. There's little saved by tapping my Watch or iPhone over an actual card. It's only slightly more convenient. Not having my real card number transmitted is a major security feature. Only thing I can think of is Apple might be prevented from mentioning this in ads as it might come across as bashing normal cards.
    calibrucemcmelodyof1974jbdragonwatto_cobrapalomineretrogustojony0GeorgeBMac
  • Reply 7 of 33
    That is impressive. I live on the coast of Oregon, in a town of ony 2000. It was slim Pickens finding establishments in our little county accepting Apple Pay for the first year. Rite Aide was about it. Now, however, businesses throughout the area, large and small are on line with Apple Pay, even out here. Thanks Apple, well done. At 35% coverage, ubiquity may soon be in the cards.
    jbdragonlostkiwi
  • Reply 8 of 33
    radarthekatradarthekat Posts: 2,897moderator
    Wallet to Watch seems the mantra at Apple.  They've done a lot of groundwork to establish the iPhone and Watch as a secure platform that will eventually hold your identification (license, passport), your access credentials (hotel room, home, office, car, rental car, computer, online passwords, event and transport tickets), your money (credit, debit, gift cards), your remote controllers, etc.  The digital future is finally upon us, and the Watch is destined to be so much more essential and central than just fitness tracking.
    edited December 2016 calijbdragonwatto_cobra
  • Reply 9 of 33
    misamisa Posts: 827member
    Canadian here: I tried going walletless for 6 months earlier this year; an experiment that ultimately was unsuccessful. Sadly, our local grocery store doesn't have "tap to pay" POS terminals and I couldn't justify keeping loose cash or cards shoved into my pockets. Hoping the hint about replacing the physical wallet occurs sooner than later. 
    Maybe were you live. The only place that doesn't accept tap-to-pay out here on the west coast are the occasional sit down restaurants. I can use it at Safeway, Real Canadian  Superstore, T&T, even Subway. Note that not every place accepts AMEX, they all accept Mastercard on Apple Pay.

    What is somewhat disappointing is that at least one of the places I go to is NEW and they only take swipe cards (Chipolte), perhaps it's a speed thing, but they are always packed. 7-11, McDonalds, KFC and Subway will take Apple Pay. IHOP and Little Caesars are the only places where I needed to use the Chip card only. Oh, the transit card reader is a NFC system but only takes chip cards for loading the transit card.


  • Reply 10 of 33
    So when is Target going to support Pay. So annoying it doesn't. 
    calimike1melodyof1974lostkiwiGeorgeBMac
  • Reply 11 of 33
    If I could get Apple Pay at Target & Publix I'd be set 
    lostkiwi
  • Reply 12 of 33
    volcanvolcan Posts: 1,745member
    That's great but still many of the top national retailers refuse to get on board.

    Home Depot
    Lowes
    Best Buy
    Target
    Costco
    Walmart
    and many other stores found in malls across America.

    The real tipping point will be when those stores get Apple Pay. There are probably several reasons why they don't get on board, but limited ability to collect customer data is probably at the top of the list and perhaps the higher fees and more expensive terminals.
    edited December 2016 patchythepiratepscooter63lostkiwiGeorgeBMac
  • Reply 13 of 33
    mike1mike1 Posts: 1,782member
    So when is Target going to support Pay. So annoying it doesn't. 
    Probably would if they hadn't gotten hacked a couple of years ago. Now, they're afraid to do ANYTHING. Even if it is actually safer.
  • Reply 14 of 33
    mike1mike1 Posts: 1,782member
    volcan said:
    That's great but still many of the top national retailers refuse to get on board.

    Home Depot
    Lowes
    Best Buy
    Target
    Costco
    Walmart
    and many other stores found in malls across America.

    The real tipping point will be when those stores get Apple Pay. There are probably several reasons why they don't get on board, but limited ability to collect customer data is probably at the top of the list and perhaps the higher fees and more expensive terminals.
    Funny. Home Depot did accept around launch. I actually used it a few times. Then, one day tap-to-pay was no longer available.
    I thought Best Buy did accept now. Maybe I'm mistaken.
    Target would be huge for me if they let you add their credit and debit cards and then accepted in the store.
    lostkiwi
  • Reply 15 of 33
    brucemcbrucemc Posts: 1,488member
    Canadian here: I tried going walletless for 6 months earlier this year; an experiment that ultimately was unsuccessful. Sadly, our local grocery store doesn't have "tap to pay" POS terminals and I couldn't justify keeping loose cash or cards shoved into my pockets. Hoping the hint about replacing the physical wallet occurs sooner than later. 

    Where do you live? I'm in Vancouver and >90% of my purchases are Apple Pay (with my Watch). Safeway, Superstore, Save-On and No Frills grocery stores here all accept tap. I use it so often that I'm surprised when I go somewhere and see "no tap" written on a piece of tape on the terminal (which literally every place that doesn't have tap has, likely because they're sick of people trying to tap).

    IMO, Apple is making one HUGE mistake with Apple Pay - not advertising the security aspect of it. That's the best part. There's little saved by tapping my Watch or iPhone over an actual card. It's only slightly more convenient. Not having my real card number transmitted is a major security feature. Only thing I can think of is Apple might be prevented from mentioning this in ads as it might come across as bashing normal cards.
    I certainly use AP on AW multiple times every day here in Ottawa.  The $100 limit does mean that in retailers with larger purchases, the old credit card has to come out - and many of these retailers don't support tap yet for that reason.

    The Apple Watch makes it very convenient (I don't have a phone with Apple Pay capability yet).  However, I agree that security is the most important.  Especially with debit (vs. credit, where protection from theft exists).  I don't want a debit card with tap enabled.  If stolen, the criminals have access to your account without any security (until you report it, or the banks anti-fraud can flag the transactions as appearing fraudulent).  With Apple Pay, I can enable tap for debit with very strong security.  Best of both worlds.
    palomine
  • Reply 16 of 33
    35%? Could've fooled me. I still have to go out of my way to use Apple Pay here in the US. In my mind the Apple Pay rollout has clearly been terrible. Another example of an amazing Apple product that is (relatively) successful despite poor management and poor marketing.

    Poor management:
    "Knocking EMV is not necessarily the way to go"??? How does this person still have her job? That's EXACTLY the way to go. The majority of the places I use a card at also has a terminal that accepts Apple Pay, but they don't enable it, even when there is such a clear advantage for the customer (poor marketing); for example, every grocery store I've been to other than Trader Joes or Whole Foods. And I hope they're not counting Square terminals in that 35%, because literally every single establishment I've been to that uses square no longer plugs in the NFC reader (because doing so obligates them to also use the chip/pin, which is time consuming and frustrating; I have to ask every time for them to plug in the NFC reader for Apple Pay, and now they've just started saying they don't accept Apple Pay).

    Poor marketing:
    The vast majority of people I (casually and pleasantly) promote Apple Pay to either 1) don't understand it and havn't bothered, or 2) are actually and genuinely fearful of the security risk, which, of course, there is none. In addition, I'm sure Starbucks is counted in that 35%, yet there is no indication Apple Pay is accepted, and I've never seen anyone use it in Starbucks other than myself.

    Yet, it's an amazing product, and every time I use it it works smoothly and people are intrigued.

    Edit: NB: I live in one of the 4 largest cities in the US.

    edited December 2016 palomine
  • Reply 17 of 33
    jbdragonjbdragon Posts: 1,930member
    I see the places I go to support Apple Pay more and more. Even if it doesn't say Apple Pay supported here, when I see the symbol on a screen (The sideways wifi fan) I go ahead and give Apple Pay a try and it generally works. Other places started supported it and you see the Apple Pay Logo on the screen. Support is growing. Anyone who thought this was just going to happen overnight are foolish. Just look how many years it took to get credit card terminals into businesses in the first place. I still remember the last job where I worked 18 years at, and earily on they were sticking credit cards into a card rolling device using carbon paper. There was no terminal. I remember when we got the first one. All these places now have to get new terminals. These Mom & Pop stores you don't have to worry so much about getting hacked as they don't have people's credit card data. It's the Big Stores like Target and Home Depot and other large chain stores that collect credit card data and then those databases get hacked. My Debit Card still has no chip! The banks are really slow in moving forward. Home Depot where Apple Pay used to work at, then stopped it, and said they were going to support it, still hasn't. Wal-Mart at some point will have to cave. No one in their right mind is going to use their QR code app garbage. Who wants to use a app for each store to pay? Target has always supported Apple Pay since launch, ONLINE ONLY!!! They really need to allow you to use it in store. Still, Apple Pay support continues to grow. It's not stopping or shrinking, but it's also not going to grow overnight.
    lostkiwiGeorgeBMac
  • Reply 18 of 33
    macxpressmacxpress Posts: 4,671member
    volcan said:
    That's great but still many of the top national retailers refuse to get on board.

    Home Depot
    Lowes
    Best Buy
    Target
    Costco
    Walmart
    and many other stores found in malls across America.

    The real tipping point will be when those stores get Apple Pay. There are probably several reasons why they don't get on board, but limited ability to collect customer data is probably at the top of the list and perhaps the higher fees and more expensive terminals.
    BestBuy accepts ApplePay. Just used it on Black Friday to buy a new TV. 
    lostkiwiGeorgeBMac
  • Reply 19 of 33
    jbdragon said:
    I see the places I go to support Apple Pay more and more. Even if it doesn't say Apple Pay supported here, when I see the symbol on a screen (The sideways wifi fan) I go ahead and give Apple Pay a try and it generally works. Other places started supported it and you see the Apple Pay Logo on the screen. Support is growing. Anyone who thought this was just going to happen overnight are foolish. Just look how many years it took to get credit card terminals into businesses in the first place. I still remember the last job where I worked 18 years at, and earily on they were sticking credit cards into a card rolling device using carbon paper. There was no terminal. I remember when we got the first one. All these places now have to get new terminals. These Mom & Pop stores you don't have to worry so much about getting hacked as they don't have people's credit card data. It's the Big Stores like Target and Home Depot and other large chain stores that collect credit card data and then those databases get hacked. My Debit Card still has no chip! The banks are really slow in moving forward. Home Depot where Apple Pay used to work at, then stopped it, and said they were going to support it, still hasn't. Wal-Mart at some point will have to cave. No one in their right mind is going to use their QR code app garbage. Who wants to use a app for each store to pay? Target has always supported Apple Pay since launch, ONLINE ONLY!!! They really need to allow you to use it in store. Still, Apple Pay support continues to grow. It's not stopping or shrinking, but it's also not going to grow overnight.
    Good points in your comment, but your estimation about Apple Pay's success seems pretty generous, especially in light of the additional problems that you listed. I've been trying to use Apple Pay as much as possible ever since I got my iPhone 6 over two years ago, and the roll-out seems to be painfully slow and poorly done. I still have to go out of my way to use it. The majority of merchants I know of have had Apple Pay capable terminals for a while now, they just don't allow it (and I try, frequently). Not to mention the nearly complete lack of public awareness of its benefits. And where it should be easiest, implementing Apple Pay in apps, there is still a significant lack of uptake, with some apps even discontinuing its use (e.g. the Wanelo shopping app).

    It seems so absurd and frustrating that such a terrific product, which significantly increases the value of the Apple ecosystem, seems so poorly managed and marketed.
    palomine
  • Reply 20 of 33
    I love Apple Pay, but I don't shop or eat at big chains very often, and support in smaller shops is not yet as common as I'd like. The strangest and most annoying thing is that I can't use it in the Apple Store app due to a bug. It's officially supported, of course, but I get an error message ("Billing Address!") when I try. I spent well over an hour about a month ago on a conference call with various representatives from Apple and my credit card company trying to solve the problem, but they were stumped at the time, and I just tried again today and it still doesn't work. Has anybody else experienced this?
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