Apple Pay overtakes Starbucks for in-store mobile payments

Posted:
in General Discussion edited December 2019
Apple Pay is the most-used mobile payment app in the United States, a new analysis claims, with the growth of Apple's payment platform in the country allowing it to overtake the Starbucks mobile app for the first time.




A study into the United States mobile payments market reveals almost 30% of smartphone users will use a mobile payment app of some description. While there are general payment platforms like Apple Pay, Google Pay, and Samsung Pay, the top spot in terms of usage has been occupied by Starbucks, with the app used solely to pay for coffee and other items within the store chain's outlets.

In a new study by eMarketer, Apple Pay's continued growth has allowed it to pass by Starbucks at a faster rate than first thought, with the single-store app failing to keep up for once.

According to the study of mobile phone users who have made at least one proximity mobile payment transaction in the last six months using a smartphone, approximately 30.3 million people will be classed as Apple Pay users by the end of 2019, representing 47.3% of proximity mobile payment users. This is up from the last study of May 2018, where Apple Pay users by the end of the year was forecast at 22 million people, though eMarketer believes the actual number was 27.7 million people.

By contrast, Starbucks was in first place in 2018's study with 23.4 million users, while in 2019 it rose to 25.2 million, giving it a representation of 39.4%. Google Pay grew from 11.1 million in 2018 to 12.2 million in 2019, and Samsung Pay from 9.9 million to 10.8 million.

The improvements were due to a "spread of new point-of-sale systems that work with the NFC signals Apple Pay runs on," eMarketer principal analyst Yory Wurmser claims. The same POS upgrades should also aid Google Pay and Samsung Pay, but Wurmser suggests "they will continue to split the Android market."

A graph of proximity mobile payment users in the US for 2019 from eMarketer.


Referencing a report from Digital Trends, the analysts highlight the availability of Apple Pay could reach 70% of US retailers by the end of 2019. Starbucks, meanwhile, can only increase the number of sales systems by adding more stores, due to the app being used just within that specific retailer, significantly limiting its potential reach.

Total spending in the US market will approach $100 billion in the United States for 2019, eMarketer reckons, with users increasing their average spend 24% year-on-year to $1,545. The overall total number of proximity mobile payment users in the United States should grow 9.1% to 64 million.

On a demographic level, adults aged 25 to 34 are the largest market in terms of size and penetration with 21.2 million users and almost 50% of smartphone users. The fastest growth demographic are users aged 55 to 64, albeit with a smaller user base.

Despite the growth improvement, junior forecasting analyst Vincent Yip suggests there is still a long way to go before it becomes a dominant payment method. "Although a growing number of millennials feel secure using payment apps, virtually all still find credit and debit cards equally convenient," said the analyst.

Apple's launch of Apple Card in the United States may help sway some of those who have more faith in physical cards, given its use of both mobile-based contactless payment and a titanium card, and so far it seems to be helping. On October 15, financial partner Goldman Sachs reported Apple Card was the "most successful credit card launch ever," with a "high level" of demand for the card a few months after launch.

Despite the improvements in the United States, the adoption rates of mobile payments in other markets continue to be far higher in other countries. One study in August revealed some 80% of Chinese consumers have made some form of smartphone payment in the last year.
«1

Comments

  • Reply 1 of 29
    Guess the Americans should travel to China and other parts of Asia where mobile payment is a norm.
    watto_cobra
  • Reply 2 of 29
    lkrupplkrupp Posts: 9,627member
    chaicka said:
    Guess the Americans should travel to China and other parts of Asia where mobile payment is a norm.
    Americans have been historically opposed to change of any kind. Some retailers in my area still require you to swipe your credit card and have taped over the slot for inserting the chip side. NFC is anathema to them. Customers, especially older ones, think Apple Pay is a gimmick designed to steal their money. 
    MisterKitcaladaniancornchipwatto_cobra
  • Reply 3 of 29
    mike1mike1 Posts: 2,802member
    lkrupp said:

     Customers, especially older ones, think Apple Pay is a gimmick designed to steal their money. 
    LOL. My mother and mother-in-law both think I'm crazy for "paying with my phone". Paying with the Watch totally freaks them out.
    I tried explaining the security benefits but was met with blank stares.
    right_said_fredboxcatcherMisterKitcaladanianstompylkruppcornchipwatto_cobra
  • Reply 4 of 29
    razorpitrazorpit Posts: 1,796member
    I think Apple has in a way botched this launch. Yes it is becoming available in more areas. Yes it is my preferred method of payment. But I can’t tell you how many times I ask if a business takes ApplePay and I get the deer in the headlights stare.
    right_said_fredMisterKitAppleExposedllamawatto_cobra
  • Reply 5 of 29
    I’ll be 70 in February, and I use Apple Pay whenever possible via my Apple Watch.

    I buy gas almost exclusively at Wawa stations, as they have compatible contactless sensors on their pumps.

    I access Chase bank ATMs' locked doors and terminals with Apple Pay.

    I use Apple Pay at Whole Foods stores.

    There are more and more compatible POS systems around which work well with Apple Pay.

    I’m sold on the system for its convenience and superior security.

    As with most "excuses", age should not keep people from benefiting from technology.
    edited October 2019 right_said_fredandrewj5790matrix077JFC_PAAppleExposedwatto_cobrabonobob
  • Reply 6 of 29
    mike1 said:
    lkrupp said:

     Customers, especially older ones, think Apple Pay is a gimmick designed to steal their money. 
    LOL. My mother and mother-in-law both think I'm crazy for "paying with my phone". Paying with the Watch totally freaks them out.
    I tried explaining the security benefits but was met with blank stares.
    Indeed, Apple Pay is the only way to pay, especially from the watch.
    razorpitAppleExposedwatto_cobra
  • Reply 7 of 29
    crowleycrowley Posts: 9,080member
    How do Starbucks payments work, does the app display a barcode or QR code or something?
  • Reply 8 of 29
    crowley said:
    How do Starbucks payments work, does the app display a barcode or QR code or something?
    To add to that question, if someone had a compatible iPhone why would they use the Starbucks app at Starbucks when they could use Apple Pay instead? Is it easier? I don't know but doesn't using the app require that you "reload" the virtual card every so often?

    lkrupp said:
    chaicka said:
    Guess the Americans should travel to China and other parts of Asia where mobile payment is a norm.
    Customers, especially older ones, think Apple Pay is a gimmick designed to steal their money. 
    I can't tell you how many people have told me they thought using Apple Pay would require them to pay more for whatever they were buying. The other excuse I have heard against using Apple Pay is that it's "too easy" and would thus lead the user to spend more money.
    edited October 2019 razorpitstompyAppleExposedwatto_cobra
  • Reply 9 of 29
    crowley said:
    How do Starbucks payments work, does the app display a barcode or QR code or something?
    Yes, barcode. If you use this you get your Starbucks s rewards, you don’t  if you use Apple Pay.

    wallgreens has done it right, you scan your rewards with Apple Watch then you use Apple Pay on you watch to pay.

    crowleystompywatto_cobra
  • Reply 10 of 29
    razorpit said:
    I think Apple has in a way botched this launch. Yes it is becoming available in more areas. Yes it is my preferred method of payment. But I can’t tell you how many times I ask if a business takes ApplePay and I get the deer in the headlights stare.
    Rather then ask if they support Apple Pay, I typically ask if they support “tap to pay, or mobile pay, paying with my phone, etc”.
    Seems to be more widely understood, or at least that’s been my experience. 
    razorpitcaladanianstompymike1watto_cobra
  • Reply 11 of 29
    larryjwlarryjw Posts: 858member
    razorpit said:
    I think Apple has in a way botched this launch. Yes it is becoming available in more areas. Yes it is my preferred method of payment. But I can’t tell you how many times I ask if a business takes ApplePay and I get the deer in the headlights stare.
    I too ask businesses if they take Apple Pay. Many still say no, but there is no deer in the headlights. Often, those behind the counter know what Apple Pay is and in fact use it when they can, but they are simply employees who don’t make the decisions what payment system they use. Often, franchise stories depend on corporate headquarters run by a set of suits who control these decisions and often must contend with the complexities of rollout when they decide to upgrade. 

    And, many operations have contracts with POS vendors who don’t support Apple Pay or other NFC systems.  

    Restaurants have a particular problem. Some take Apple Pay, but they don’t have devices that can be brought to the table. To pay your bill, you have to walk up to their one register and do the transaction there. It’s going to take some considerable time, effort, and capital to make taking Apple Pay convenient. Most of these businesses take the credit cards and therefore will take the Apple Card. You’ll get 1% cash back rather than 2% if using the Apple Watch, but this also creates demand for businesses to upgrade.

    I don’t mind, and I think it a good idea, to keep asking businesses if they take Apple Pay. The more they experience the demand, the more likely the business will be forced to take the jump. 
    edited October 2019 watto_cobra
  • Reply 12 of 29
    Starbucks pay (or whatever it’s called) also requires you to load money onto it, so that there’s less % loss to the transaction fees ... good for them, no real impact on the customer.

    It’s basically Starbuck’s own MCX (or whatever that junky Walmart / CVS-backed idea was called) but it worked because Starbucks could get it off the ground since they were the only participant.
    edited October 2019 watto_cobra
  • Reply 13 of 29
    crowley said:
    How do Starbucks payments work, does the app display a barcode or QR code or something?
    To add to that question, if someone had a compatible iPhone why would they use the Starbucks app at Starbucks when they could use Apple Pay instead? Is it easier? I don't know but doesn't using the app require that you "reload" the virtual card every so often?

    lkrupp said:
    chaicka said:
    Guess the Americans should travel to China and other parts of Asia where mobile payment is a norm.
    Customers, especially older ones, think Apple Pay is a gimmick designed to steal their money. 
    I can't tell you how many people have told me they thought using Apple Pay would require them to pay more for whatever they were buying. The other excuse I have heard against using Apple Pay is that it's "too easy" and would thus lead the user to spend more money.
    To answer, the app displays a barcode, yes. And the have special scanners that make it quite easy, but the main reason I use it is that they don’t accept Apple Pay in the store. They do through the app, though. So I load my Starbucks card with Apple Pay, and use it in the store. 
    cornchipwatto_cobra
  • Reply 14 of 29
    I'd be amazed if Samsung Pay is really only 1/3 of Apple Pay. I live in a country where Android has probably 80% market share and all terminals have been contactless for the last decade yet I doubt Samsung would have that relative share. I know it has some non-NFC functionality but does anyone use it? Any thoughts from people in the US?
  • Reply 15 of 29
    JFC_PAJFC_PA Posts: 645member
    crowley said:
    How do Starbucks payments work, does the app display a barcode or QR code or something?
    The app displays a barcode that gets scanned which connects the purchase both to the stored money (paid into the Starbucks account:,they accept Applepay for that refill function) and the rewards program for “Stars” applicable to future free stuff. 

    There’s also the option to store/display the barcode via the Apple Wallet where the remaining funds total is also displayed. 
    crowleywatto_cobra
  • Reply 16 of 29
    JFC_PAJFC_PA Posts: 645member
    With my local Wawa now accepting ApplePay at the pump my last routine purchase has shifted. Groceries (Acme, Giant, Wegmans) have long been ApplePay. 

    obtw? I’m over 70: it’s not about age. I mean come on computers have been around since the sixties!
    edited October 2019 GeneralBrockLoneStar88AppleExposedwatto_cobrabonobob
  • Reply 17 of 29
    JFC_PAJFC_PA Posts: 645member
    I'd be amazed if Samsung Pay is really only 1/3 of Apple Pay. I live in a country where Android has probably 80% market share and all terminals have been contactless for the last decade yet I doubt Samsung would have that relative share. I know it has some non-NFC functionality but does anyone use it? Any thoughts from people in the US?
     Apple Pay is the most-used mobile payment app in the United States,...”

    the articles numbers are all United States not global and contactless is far from common even today. My local gas vendor just changed and I’m not aware of any other gas chain in my state (PA) that has, in a trip across the country the gas stations with contactless were rare. 

    Public transportation systems are mostly recent in either planning (Phila) or implementing (NYC, D. C. has for a few years) contactless. 
    edited October 2019 caladanianwatto_cobra
  • Reply 18 of 29
    Obviously Apple should buy Starbucks.
    watto_cobra
  • Reply 19 of 29
    JFC_PAJFC_PA Posts: 645member
    Obviously Apple should buy Starbucks.
    More likely they’re Peet’s fans. 
  • Reply 20 of 29
    chaicka said:
    Guess the Americans should travel to China and other parts of Asia where mobile payment is a norm.
    And Canada. And Europe.
    watto_cobra
Sign In or Register to comment.