Munster: Apple Pay distribution low, but peer-to-peer and in-browser payments to goose adoption in

AppleInsiderAppleInsider
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in iPhone edited January 2016
Fresh data from investment firm Piper Jaffray shows Apple Pay adoption hovering between 10 and 20 percent, but analyst Gene Munster expects numbers to rise in 2016 as Apple integrates attractive new features like peer-to-peer payments and in-browser integration.




According to the latest statistics from Piper Jaffray's Apple Pay adoption tracker, uptake among U.S. iPhone users is relatively low, but the system is "overwhelmingly the share leader" in point-of-sale mobile payments, Munster said in a note to investors on Thursday.

Munster notes Apple Pay bank partnerships are accelerating, jumping from 515 supporting banks in September to 930 as of today. A provided chart shows the number of U.S. banks accepting Apple's service has roughly doubled every three months since March 2015, with most of that growth originating from U.S. institutions. Apple's rolling list of service partners, which added 58 new U.S. card issuers earlier this month, backs up Munster's data.

While not growing at the same pace, the number of apps supporting Apple Pay in-app payments adoption is also increasing and now sits at 131 titles. In June 2015, Munster modeled 50 apps as accepting Apple Pay, which rose to 70 apps in September. Large retailers are also slow to adopt, reaching 98 named stores this month, including 27 that have pledged forthcoming support. The number of retailers that actually accept Apple Pay is unknown, however, as smaller outlets and local establishments are not counted. Munster estimates Apple Pay is available at more than one million POS locations in the U.S.

Looking ahead, the analyst believes Apple will introduce new features like peer-to-peer and in-browser payments later this year. A report in November said Apple has already discussed a potential P2P rollout with major banks like J.P. Morgan Chase, Capital One, Wells Fargo and U.S. Bancorp, though no evidence has surfaced to support such claims.

"While 2015 was the year of Apple Pay adoption at banks, retailers and in-app, we believe 2016 will be the year of new features for Apple Pay," Munster said. "We believe peer-to-peer will be an important feature to increase overall consumer usage and awareness of Apple Pay and see mobile in-browser payments as a significant addition to the Apple Pay addressable market."

Apple has yet to make an official move toward P2P, a market controlled by established service options from PayPal and Square. If and when the company decides to throw its hat into the ring, Apple Pay P2P will have instant access to a massive installed user base that could catalyze wider adoption.
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Comments

  • Reply 1 of 27
    Mr_GreyMr_Grey Posts: 118member
    They could probably double adoption overnight if they simply convinced the Canadian and Australian banks to agree to use it.  Canada in particular has had the necessary terminal infrastructure in place for over a decade.  It's over a year late already. 
    edited January 2016
  • Reply 2 of 27
    leptonlepton Posts: 111member
    They have plenty of US banks signed up, but very few retailers. They should work on that.
    palomine
  • Reply 3 of 27
    lkrupplkrupp Posts: 10,557member
    lepton said:
    They have plenty of US banks signed up, but very few retailers. They should work on that.
    And the retailers who do support it have poorly trained sales clerks and often improperly configured NFC terminals that sporadically deny the transactions. I purchased a $10 item last week from my local Microcenter using Apple Pay. The terminal required my debit card’s PIN number to complete the transaction and then the clerk asked me for my name on top of it. Why not just use cash?
    edited January 2016 latifbppalomine
  • Reply 4 of 27
    yojimbo007yojimbo007 Posts: 1,165member
    In LA area... I can easly say that about 60% to 70% of my transactions are now done through applepay on the applewatch.... From chain stores to mom and pop stores of all kinds.

    This was not the case a few months ago... There has been an exponential growth in merchants accepting apple pay and im loving it...so do those who see my transaction on the applewatch... Its always followed by a comment like.. "How cool ..is that the apple thingy... ." And smiles . 

    edited January 2016 radarthekatlatifbp
  • Reply 5 of 27
    maclvr03maclvr03 Posts: 198member
    P2P will be a nice addition. I like the Cash app by Square but have only used it twice. All of my friends have iPhones and use Apple Pay so if and when it comes to P2P Apple Pay I won't need the Cash app. I think it's difficult to convince your friends to download an app like that but with Apple Pay it will be right there already. 
  • Reply 6 of 27
    rob53rob53 Posts: 3,248member
    lkrupp said:
    lepton said:
    They have plenty of US banks signed up, but very few retailers. They should work on that.
    And the retailers who do support it have poorly trained sales clerks and often improperly configured NFC terminals that sporadically deny the transactions. I purchased a $10 item last week from my local Microcenter using Apple Pay. The terminal required my debit card’s PIN number to complete the transaction and then the clerk asked me for my name on top of it. Why not just use cash?
    How true. I'd also like to see a guide on how ApplePay handles different levels of transactions. When do I need to sign? Do I ever need to sign when I'm using my finger/thumb print to validate my credit card? As everyone knows, people's signatures nowadays stink. Nobody can read 80% of them (I made up this percentage) with many of them being a couple wavy lines. That's not a signature so why worry about it. I would like this information so I can give it to the retailers to help them since, as you say, very few of them have any idea what ApplePay is. I'd also like an update on the chipped card requirements since I continue to see large retailers who still haven't installed them. 
  • Reply 7 of 27
    anantksundaramanantksundaram Posts: 20,404member
    I live in a small town. Roughly half my purchases are done via ApplePay (mostly via AP-compatible NFC terminals). Very impressive. 

    My (fairly tech-savvy) kids know I use it regularly, and they both have 6's (my wife still prefers her 5S form factor, but she may be finally considering a move to the 6s). Yet, neither of them has bothered with ApplePay yet. 

    Can't quite figure this out.... Except perhaps that we (and Apple) get more excited about this stuff than most people do. And/or perhaps Apple could be marketing it a bit better. 
  • Reply 8 of 27
    rob53rob53 Posts: 3,248member

    maclvr03 said:
    P2P will be a nice addition. I like the Cash app by Square but have only used it twice. All of my friends have iPhones and use Apple Pay so if and when it comes to P2P Apple Pay I won't need the Cash app. I think it's difficult to convince your friends to download an app like that but with Apple Pay it will be right there already. 
    Speaking of Square, I received my contactless + chipped card reader. I also requested free decals from both Apple and Square. I hate decals on computers (makes them look like a Windows PC or a race car) but I wanted an easy way for people to see I take ApplePay. I talked to a cashier and suggested they get the ApplePay decals so people know it's accepted when they get to the counter instead of finding out when the ApplePay logo finally shows up on the screen. Unfortunately, I think the users are going to have to force the adoption of ApplePay. 



  • Reply 9 of 27
    mac_128mac_128 Posts: 3,454member
    Maybe 51% of all active iPhones as of last September being a 5S or older, had something to do with it too. 
  • Reply 10 of 27
    johnhwoodjohnhwood Posts: 9member
    Mr_Grey said:
    They could probably double adoption overnight if they simply convinced the Canadian and Australian banks to agree to use it.  Canada in particular has had the necessary terminal infrastructure in place for over a decade.  It's over a year late already. 
    Too bad the Big 4 Aussie banks are run like a cartel. Apple just need to crack one of them and they'll all fall like domino's. Wondering why apple wouldn't have started with a P2P strategy to begin with? Get users comfortable like using paypal, then roll it out to physical stores.
    edited January 2016
  • Reply 11 of 27
    latifbplatifbp Posts: 544member
    rob53 said:

    maclvr03 said:
    P2P will be a nice addition. I like the Cash app by Square but have only used it twice. All of my friends have iPhones and use Apple Pay so if and when it comes to P2P Apple Pay I won't need the Cash app. I think it's difficult to convince your friends to download an app like that but with Apple Pay it will be right there already. 
    Speaking of Square, I received my contactless + chipped card reader. I also requested free decals from both Apple and Square. I hate decals on computers (makes them look like a Windows PC or a race car) but I wanted an easy way for people to see I take ApplePay. I talked to a cashier and suggested they get the ApplePay decals so people know it's accepted when they get to the counter instead of finding out when the ApplePay logo finally shows up on the screen. Unfortunately, I think the users are going to have to force the adoption of ApplePay. 



    I received mine also. I have clients who I'd say are very intelligent people, but still haven't even set up  Pay on their iPhones, much less used it. I'm advocating strongly they do, and it seems I might have to walk them through the setup so they can actually experience it and see the benefit. Otherwise they've just not paid any attention to that feature of their iPhone.
  • Reply 12 of 27
    welshdogwelshdog Posts: 1,897member
    I used Apple Pay successfully at a McDonald's.  Weeks later I tried to use it at another McDonald's (I don't normally eat at McD but stuff happened).  I asked the cashier if she had Apple Pay.  She said something back to me that I thought was "Yes Apple Pay."  Turns out she thought I was asking for "apple pie." Not kidding.  Then, when I clarified, she tried to use the system and it didn't work.  I'm not 100% sure she even understood what it was.  All this took place at the drive through so maybe that was a factor.
    latifbpchia
  • Reply 13 of 27
    cash907censoredcash907censored Posts: 83member
    I didn't use Apple Pay very often at all until I got my Apple Watch. Today I used it for gas, at a vending machine, and once more picking up Subway on the way home. I never thought pulling out my wallet versus just clicking the contacts button on my watch twice would be such a big difference, but now I find myself wincing when I go anywhere that doesn't accept Apple Pay. Thankfully that doesn't happen often nowadays. 

    As a Square user for my business, I'd drop it in a heartbeat if Apple launched a peer to peer Apple Pay solution. Tap the home button twice, hold my phone up to my clients and done? Can't beat that kind of simplicity. 
    latifbp
  • Reply 14 of 27
    avidthinkeravidthinker Posts: 82member
    And why is this at all surprising?  Apple Pay is not universally available as an option, and the product was only released about 14 months ago!  Habits (especially those re: money) are slow to change.  Why do you think most people still bank at places they totally despise?
    palomine
  • Reply 15 of 27
    LaPorte_HaikuLaPorte_Haiku Posts: 2member
    I try to use ApplePay everywhere I go, but almost no retailers are using it. Best Buy, Sprouts, McDonalds, Subway, and McCarran Airport parking are the only reliable place I can use it. Retailers need to get on board not only with contactless payments, but also with chip & pin.
  • Reply 16 of 27
    LaPorte_HaikuLaPorte_Haiku Posts: 2member
    johnhwood said:
    Mr_Grey said:
    They could probably double adoption overnight if they simply convinced the Canadian and Australian banks to agree to use it.  Canada in particular has had the necessary terminal infrastructure in place for over a decade.  It's over a year late already. 
    Too bad the Big 4 Aussie banks are run like a cartel. Apple just need to crack one of them and they'll all fall like domino's.
    Wondering why apple wouldn't have started with a P2P strategy to begin with? Get users comfortable like using paypal, then roll it out to physical stores.
    My recent trip to Oz was an example of how everything is wrong. I successfully used my American iPhone and ApplePay accounts at EVERY RETAILER that accepts PayWave. Of all the purchases I made, only one was made with physical card swipe. Australia needs the banks on board, and America needs the retailers on board.
  • Reply 17 of 27
    cnocbuicnocbui Posts: 3,613member
    LaPorte_Haiku said:
    johnhwood said:
    Too bad the Big 4 Aussie banks are run like a cartel. Apple just need to crack one of them and they'll all fall like domino's.
    Wondering why apple wouldn't have started with a P2P strategy to begin with? Get users comfortable like using paypal, then roll it out to physical stores.
    My recent trip to Oz was an example of how everything is wrong. I successfully used my American iPhone and ApplePay accounts at EVERY RETAILER that accepts PayWave. Of all the purchases I made, only one was made with physical card swipe. Australia needs the banks on board, and America needs the retailers on board.
    If Apple wants it adopted in countries like Australia, they could just offer it for free, then it might stand a chance of being accepted.
  • Reply 18 of 27
    cintoscintos Posts: 113member
    lkrupp said:
    And the retailers who do support it have poorly trained sales clerks and often improperly configured NFC terminals that sporadically deny the transactions. I purchased a $10 item last week from my local Microcenter using Apple Pay. The terminal required my debit card’s PIN number to complete the transaction and then the clerk asked me for my name on top of it. Why not just use cash? Similar situation today. I used Apple Pay at a grocery store which prominently displayed the Apple Pay logo. Placing my phone near the terminal brought up the app and I used my fingerprint to authorize. THEN, the clerk asked to see the physical card AND see my ID. That would drive me back to my cash card & pin. It is true though that as more retailer get chipped terminals that require the card be inserted into the unit, the ensuing D E L A Y in processing will help motivate folks to use Apple Pay (providing the retailer drops the stupid physical card / ID)
  • Reply 19 of 27
    sirlance99sirlance99 Posts: 1,293member
    rob53 said:

    maclvr03 said:
    P2P will be a nice addition. I like the Cash app by Square but have only used it twice. All of my friends have iPhones and use Apple Pay so if and when it comes to P2P Apple Pay I won't need the Cash app. I think it's difficult to convince your friends to download an app like that but with Apple Pay it will be right there already. 
    Speaking of Square, I received my contactless + chipped card reader. I also requested free decals from both Apple and Square. I hate decals on computers (makes them look like a Windows PC or a race car) but I wanted an easy way for people to see I take ApplePay. I talked to a cashier and suggested they get the ApplePay decals so people know it's accepted when they get to the counter instead of finding out when the ApplePay logo finally shows up on the screen. Unfortunately, I think the users are going to have to force the adoption of ApplePay. 



    I mine as well. It's a pretty nifty device. Why didn't you put the Android Pay logo decal on there as well? I would want as many people as I can to pay any way they want. 
    gatorguy
  • Reply 20 of 27
    sirlance99sirlance99 Posts: 1,293member
    cash907censored said:
    I didn't use Apple Pay very often at all until I got my Apple Watch. Today I used it for gas, at a vending machine, and once more picking up Subway on the way home. I never thought pulling out my wallet versus just clicking the contacts button on my watch twice would be such a big difference, but now I find myself wincing when I go anywhere that doesn't accept Apple Pay. Thankfully that doesn't happen often nowadays. 

    As a Square user for my business, I'd drop it in a heartbeat if Apple launched a peer to peer Apple Pay solution. Tap the home button twice, hold my phone up to my clients and done? Can't beat that kind of simplicity. 
    So you only accept payments from people that use iPhones and Apple Pay? Seems limiting.
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