Apple Pay adoption and usage rates suffer despite strong iPhone 6 sales, study finds
According to a study published this week, the number of iPhone owners willing to try out Apple Pay has declined over the past three months alongside a drop in usage rates from both casual and previously committed users.
An ongoing survey conducted by InfoScout in cooperation with PYMNTS.com shows the number of eligible Apple Pay users who tried the service dropped from 15.1 percent in March to 13.1 percent in June. Further, respondents answering yes to the question, "Did you use Apple Pay on this transaction" fell from 39.3 percent to 23 percent over the same period.
"As more and more people buy iPhone 6's we are seeing a lower percentage of them adopting or trying Apple Pay," said Jared Schrieber, CEO of InfoScout. "That shouldn't necessarily be a surprise as we move from people who are early adopters and more likely to try things, to later adopters who are not."
The results can in part be attributed to security concerns, as customers declining to use Apple Pay for this reason jumped from 15 percent to 19 percent. On a related note, it appears poor user experiences are having a detrimental effect on 4 percent of existing users who are no longer willing to use the service out of fear that it might not work.
Apple's customer outreach program also has a long way to go. The number of iPhone owners who have not yet to tried the system because they don't know how it works rose slightly from 31 percent in March to 34 percent in June.
In spite of the seemingly negative survey results, Apple Pay remains one of the most popular touchless payment solutions around, thanks in no small part to iPhone's gigantic install base. For its fiscal third quarter of 2015, Apple reported iPhone sales of 47.5 million units, an astonishing performance up 35 percent from the same time last year.
As Apple Pay-compatible devices proliferate, Apple is working to expand backend support and just recently passed a milestone by netting support from 400 participating issuers. On the other side of the equation are merchants that are slowly warming to the idea of NFC-based transactions.
It should be noted that the InfoScout survey covers only the U.S. market, a demographic much more familiar with credit card swiping than tap-to-pay. Apple is slowly rolling out Apple Pay internationally as it reaches agreements with major banks and most recently launched the service in the UK. Other regions that have long since integrated touchless payment methods into their respective shopping cultures, like China and Japan, have yet to be tapped.
An ongoing survey conducted by InfoScout in cooperation with PYMNTS.com shows the number of eligible Apple Pay users who tried the service dropped from 15.1 percent in March to 13.1 percent in June. Further, respondents answering yes to the question, "Did you use Apple Pay on this transaction" fell from 39.3 percent to 23 percent over the same period.
"As more and more people buy iPhone 6's we are seeing a lower percentage of them adopting or trying Apple Pay," said Jared Schrieber, CEO of InfoScout. "That shouldn't necessarily be a surprise as we move from people who are early adopters and more likely to try things, to later adopters who are not."
The results can in part be attributed to security concerns, as customers declining to use Apple Pay for this reason jumped from 15 percent to 19 percent. On a related note, it appears poor user experiences are having a detrimental effect on 4 percent of existing users who are no longer willing to use the service out of fear that it might not work.
Apple's customer outreach program also has a long way to go. The number of iPhone owners who have not yet to tried the system because they don't know how it works rose slightly from 31 percent in March to 34 percent in June.
In spite of the seemingly negative survey results, Apple Pay remains one of the most popular touchless payment solutions around, thanks in no small part to iPhone's gigantic install base. For its fiscal third quarter of 2015, Apple reported iPhone sales of 47.5 million units, an astonishing performance up 35 percent from the same time last year.
As Apple Pay-compatible devices proliferate, Apple is working to expand backend support and just recently passed a milestone by netting support from 400 participating issuers. On the other side of the equation are merchants that are slowly warming to the idea of NFC-based transactions.
It should be noted that the InfoScout survey covers only the U.S. market, a demographic much more familiar with credit card swiping than tap-to-pay. Apple is slowly rolling out Apple Pay internationally as it reaches agreements with major banks and most recently launched the service in the UK. Other regions that have long since integrated touchless payment methods into their respective shopping cultures, like China and Japan, have yet to be tapped.
Comments
"The number of iPhone owners who have not yet to tried the system because they don't know how it works rose slightly from 31 percent in March to 34 percent in June."
Home Depot use to accept it, now it does not. And it fails at least 75% of the time I try to use it at Panera across multiple locations. And Panera was a launch partner
Apple Pay needs some big wins. The pending MCX implosion should help
This mostly had to do with the wrong but understandable choice to debut in the US. There are still a lot of American retailers who don't have touchless terminals, so I'm sure it's frustrating not knowing if it's going to work until you get to the front of the line and look at the terminal. Might as well have a card out. Apple Pay is actually much better suited to Canada or certain places in Europe.
This will change closer to the end of the year when the liability shift happens. Most banks are still in the middle of issuing chip based cards and most large retailers are still transitioning to newer terminals.
For this reason, Apple should continue consumer outreach, ads, and other ways to explain to people what Apple Pay is, instead of assuming that everyone will go back and watch a 2-hour long keynote from last year with the Apple Pay announcement and demo buried somewhere in the middle.
You know, work.
How would starting in another country help American adoption? How do you know that Apple would have had as much success with the banks in other countries? Yes, Apple does need retailers onboard for this to work, but the banks have to come first. The US was the smartest way to go about this because Apple can get the banks on board much easier and because the US retailers will need more time to work in NFC-based payments.
Too slow for what? It's been less than a year and over 90% of all US banks support it, and there are 72 retailers on board now with another 37 coming soon*.
Apple Pay has been nothing but big wins since it was first introduced. In a few years you'll be surprised if a retailer doesn't accept NFC-based payments.
* With only about 5 weeks left before the iPhone event, if I were running Apple I may not want to release a lot of ApplePay data at this point. Instead I'd sit on it and then announce how much of a success it has been in under a year, how we'll be expanding into more countries with even more banks, and how there are hundreds(?) of new retailer partners coming over the next year.
Apple Pay has been nothing but big wins since it was first introduced. In a few years you'll be surprised if a retailer doesn't accept NFC-based payments.
MasterCard has a mandate for all new EU hardware accept NFC by 2016, and all terminals are to be replaced by 2020. MasterCard just did Apple's work for them in one fell swoop, but where's Apple Pay there? Where's the US mandate then?
That's a good point. I've called a couple banks that I have yet to receive an updated card, they don't seem to have any real info as to when that will happen, all they tell is that it should happen this year. I wonder if retailers are also doing a similar prioritization so they can support C&P without getting penalized. I've tried to use many newly installed card readers this in the past few months and had Apple Pay fail even though the NFC radios are working and the C&P fail, thus resulting in having to the magnetic strip like a Neanderthal. I assume this is simply a driver and/or Windows point-of-sale system update.
I haven't tried it yet. Waiting for my primary card to be on it.
Huh? How did they MC do Apple's work for them? Are you saying that MC are the ones that designed the system that Apple Pay is based on, including writing the iOS code, or are you saying that Apple should have created a mandate to force all retailers in the EU to update their PoS Terminals, because neither of those make any sense to me.
But this is more a terminal issue than anything...how many people will look to use it if many places are not set up to accept it?
And once again, who is pyments.com, and how in the world would they get such data sets? They don't seem to mention anything about the survey size, from which merchants or financial institutions they culled data, methodology, geo, etc etc. More click bait it appears
What will help is getting rewards cards integrated into Apple Pay transactions, and eliminating the need to sign. Why sign, if it is not possible anyone but the verified user to conduct an Apple Pay transaction? I draw a line through the box, no one even checks nor have they for years.
This will change closer to the end of the year when the liability shift happens. Most banks are still in the middle of issuing chip based cards and most large retailers are still transitioning to newer terminals.
The change will happen much after the end of the year. Example is Home Depot. They stopped taking Apple Pay in the process of updating the terminals to contact EMV. I expect merchants will want to limit themselves to one thing at a time.
Huh? How did they MC do Apple's work for them? Are you saying that MC are the ones that designed the system that Apple Pay is based on, including writing the iOS code, or are you saying that Apple should have created a mandate to force all retailers in the EU to update their PoS Terminals, because neither of those make any sense to me.
They created the demand for NFC phones by forcing the ecosystem onto merchants. Simple. Apple needs to build a merchant ecosystem, sign issuers on, and sell hardware that has no demand, as this survey indicates.
it is hard to believe that once one has tried Apply Pay one would ever go back to the old way. These days I would avoid places that doesn't accept Apply Pay if possible.
I whole heartedly agree. And using it from the apple watch is even easier. I am finding that several merchants apparently are training their employees for CurrenC as they are pushing a damned QR code out to the terminal display when they see me trying to use either the watch or iPhone. I have to tell them NO, just do whatever you used to do when it was a card swipe.
Who says they even surveyed Apple Pay equipped merchants ?
Did you pay with Apple Pay ?
No. (Missing) I couldn't
Just saying
I'm very lost. Apple is getting merchants signing on to officially support Apple Pay, but they also don't have to because it's just an NFC-based payment so unless they artificially stop supporting NFC-based payments they will support Apple Pay through their systems. Sp what HW would Apple have to sell to get merchants to use Apple Pay?
I'm very lost. Apple is getting merchants signing on to officially support Apple Pay, but they also don't have to because it's just an NFC-based payment so unless they artificially stop supporting NFC-based payments they will support Apple Pay through their systems. Sp what HW would Apple have to sell to get merchants to use Apple Pay?
You fail to think. Let me put it as simply as I can:
What Apple needs to do:
1. Convince merchants to install NFC terminals because they are not ubiquitous.
2. Convince banks to sign up.
3. Convince customers to use it.
Problems:
1. Merchants won't pay for terminals because nobody will use it.
2. Banks won't sign up because nobody will use it.
3. Customers won't buy NFC phones and activate it because there's nowhere to use it.
Stalemate.
MasterCard's solution.
1. Merchants must install terminals period. No argument allowed.
3. Customers can now use it everywhere. Excuse gone.
2. Now banks will sign up because people want to spend their money with it.
Simple.