Apple Pay exceeding expectations with 400 percent user growth in 2016

Posted:
in iPhone edited July 2016
During Apple's quarterly financial results call for the third fiscal quarter of 2016, CEO Tim Cook shed more light on Apple Pay's adoption and growth with purchasers and retailers.




Cook noted that Apple Pay's monthly users are up over 400 percent year over year. Out of the nine markets in which Apple Pay is live, more than half of the service's transaction volume is coming from outside the U.S.

Additionally, Cook noted that three million retailers now accept Apple Pay in the U.S. Worldwide, there are more than 11 million points of sale across all participating Apple Pay countries. Retailers are telling Apple that three out of four contactless payments in the U.S. are being made with Apple Pay, instead of competing services Android Pay or Samsung Pay.

Answering a question from Gene Munster, Cook specified Apple Pay revenues as less about profits, and more about a "great feature for our customers" with iPhones. Cook said that while growth is astronomical, the base is relatively very small, as compared to the overall Apple user base.

Apple has yet to break out concrete numbers of regular users of the service. Analysts believe that U.S. Apple Pay transactions accounted for most of an estimated $10.9 billion in transactions in 2015. Only four countries had official Apple Pay support in 2015.

After an October 2014 U.S. launch, the Apple Pay service expanded to the U.K., Canada, and Australia. In 2016, Apple Pay launched in China, Singapore, Switzerland, France, and Hong Kong.

Revenue from Apple Pay contributes to the "services" category of the company's financial report. Services came in at $6 billion, up 20 percent from the year-ago quarter. Services count for about 11 percent of Apple's overall revenue, with Cook claiming that if it was separately accounted for, would qualify for a Fortune 100 company at some point in 2017.
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Comments

  • Reply 1 of 29
    nolamacguynolamacguy Posts: 4,758member
    but but but - people on the other week's AP thread said offering an in-store $5 AP credit made apple "look weak"...
    lostkiwiirelandjackansiDeelronchialatifbp
  • Reply 2 of 29
    netroxnetrox Posts: 1,418member
    I use Apple Pay when possible. It is SO much faster and easier than using chip cards and entering pin code or signing.
    maclvr03lostkiwiwelshdogButidonttweetTurboPGTpscooter63caliDeelronchiabadmonk
  • Reply 3 of 29
    maclvr03maclvr03 Posts: 198member
    netrox said:
    I use Apple Pay when possible. It is SO much faster and easier than using chip cards and entering pin code or signing.
    I totally agree. Some places that I'm really just unsure if they have Apple Pay, I ask, and the cashier literally has no idea what I'm talking about.

    Also, I've never used a pin while using my chip card, just signing above a certain amount. I think a pin is much better though. 
  • Reply 4 of 29
    dws-2dws-2 Posts: 276member
    I really dislike the new stupid chip readers. They are so slow. Yesterday, I went to four different places, and they all took Apple Pay (a local co-op, Best Buy, the Apple Store, and Petsmart). It's still relatively new, though, because the cashiers still occasionally act amazed.
    nostrathomasDeelronjfc1138badmonkmike1potatoleeksouppalominejony0
  • Reply 5 of 29
    nealc5nealc5 Posts: 44member
    Many places, restaurants in particular, have terminals that can do ApplePay, but the cashiers either don't know how to use them, or they are behind the counter where you can't use your phone.  I've had to tell many clerks to simply ring it up as a credit card transaction, and then when it's ready, I use my phone.  Some are amazed that it works.  Apple needs to do outreach to all to show how Apple Pay is actually beneficial, since it speeds up the checkout transaction vs a chip card.  Perhaps financial incentives to get Apple Pay used?
    dws-2calipalomine
  • Reply 6 of 29
    nealc5nealc5 Posts: 44member
    Many places, restaurants in particular, have terminals that can do ApplePay, but the cashiers either don't know how to use them, or they are behind the counter where you can't use your phone.  I've had to tell many clerks to simply ring it up as a credit card transaction, and then when it's ready, I use my phone.  Some are amazed that it works.  Apple needs to do outreach to all to show how Apple Pay is actually beneficial, since it speeds up the checkout transaction vs a chip card.  Perhaps financial incentives to get Apple Pay used?
  • Reply 7 of 29
    SoliSoli Posts: 10,035member
    I can't help but wonder if Apple planned the Apple Pay release in the US with the chip card reform because they know it was going to be a poor transition. Besides many still not taking chip cards, the ones that do typically seem to take much longer to work than over swiping the card or using NFC-based payments, the latter of which I don't understand.

    I've also encountered completion sounds with chip card readers that sound like a system error (CVS finally updated their readers to a more pleasant "ding" sound), and other places that use to not have you sign for small amounts with the card swipe now have you sign for any amount with the chip card. Since this does slow down the transaction, which can affect sales and customer satisfaction I've suggested their call their hosting company to see if they can get an update pushed that will forego the signing under a certain threshold. So far, nothing seems to have changed on that front, for the places I frequent.
    nolamacguypscooter63calipalomine
  • Reply 8 of 29
    nealc5nealc5 Posts: 44member
    Many places, restaurants in particular, have terminals that can do ApplePay, but the cashiers either don't know how to use them, or they are behind the counter where you can't use your phone.  I've had to tell many clerks to simply ring it up as a credit card transaction, and then when it's ready, I use my phone.  Some are amazed that it works.  Apple needs to do outreach to all to show how Apple Pay is actually beneficial, since it speeds up the checkout transaction vs a chip card.  Perhaps financial incentives to get Apple Pay used?
  • Reply 9 of 29
    Soli said:
    I can't help but wonder if Apple planned the Apple Pay release in the US with the chip card reform because they know it was going to be a poor transition. Besides many still not taking chip cards, the ones that do typically seem to take much longer to work than over swiping the card or using NFC-based payments, the latter of which I don't understand.

    I've also encountered completion sounds with chip card readers that sound like a system error (CVS finally updated their readers to a more pleasant "ding" sound), and other places that use to not have you sign for small amounts with the card swipe now have you sign for any amount with the chip card. Since this does slow down the transaction, which can affect sales and customer satisfaction I've suggested their call their hosting company to see if they can get an update pushed that will forego the signing under a certain threshold. So far, nothing seems to have changed on that front, for the places I frequent.
    Point of sale payments in the US is incredibly backward compared to other parts of the world.

    The US is just getting chip & pin, and NFC. By contrast other countries have been using Chip & Pin for 20+ years and iNFC for 10+ years . In Austealia you haven't been able to sign for several years now (5 ?) . The infrastructure present in these countries is almost universal, and in those where Apple Pay has launched, you can do 80-90 percent of your transactions with Apple Pay.

    its very fast and convenient, and has none of the problems you describe.

    At times the US is a backwater, blocked up by special interest groups and cheap labor - this is one of those times. 

    Peversely this his makes Apple Pay a harder sell to banks in these countries as it's merely incremental, and not revolutionary.
    palominebrucemc
  • Reply 10 of 29
    kevin keekevin kee Posts: 1,289member
    In Australia, Paypass has become a standard for several years so ApplePay is not new here, although with enhanced security. That's why it would take a longer time to convince the big four banks to adapt it. Each of these banks already invested in Paypass. Right now we only have one bank that support ApplePay but no indications for the others to follow.
    edited July 2016
  • Reply 11 of 29
    irelandireland Posts: 17,798member
    but but but - people on the other week's AP thread said offering an in-store $5 AP credit made apple "look weak"...
    Like one or two people on a forum.
  • Reply 12 of 29
    EsquireCatsEsquireCats Posts: 1,268member
    kevin kee said:
    In Australia, Paypass has become a standard for several years so ApplePay is not new here, although with enhanced security. That's why it would take a longer time to convince the big four banks to adapt it. Each of these banks already invested in Paypass. Right now we only have one bank that support ApplePay but no indications for the others to follow.
    The other factor worth mentioning here is Mastercard. The largest consumer bank (Commonwealth) utilise Mastercard for their credit and direct debit systems, yet Australians are still waiting for Mastercard to finalise the tokenisation roll out (a key differentiator and requirement of Apple Pay). Once the biggest banks are on board the others are quick to follow (mostly because negotiations always start with the top-level banks, along with any service exclusivity periods granted.)
  • Reply 13 of 29
    nolamacguynolamacguy Posts: 4,758member
    Soli said:

    I've also encountered completion sounds with chip card readers that sound like a system error (CVS finally updated their readers to a more pleasant "ding" sound), and other places that use to not have you sign for small amounts with the card swipe now have you sign for any amount with the chip card. Since this does slow down the transaction, which can affect sales and customer satisfaction I've suggested their call their hosting company to see if they can get an update pushed that will forego the signing under a certain threshold. So far, nothing seems to have changed on that front, for the places I frequent.
    yes the "ERRNT! ERRNT! ERRNT!" sound at CVS was atrocious. further proof that nobody has any idea what they're doing, from the POST manufacturer who supplied the sound to the retailer CTO who okayed it. anti user. they're clueless. 
    isteelersnostrathomascalichia
  • Reply 14 of 29
    welshdogwelshdog Posts: 1,897member
    I use Apple Pay when I can and it is nice to see so many small independant businesses using it (typically through the new Square reader). Stouthaus Coffee? Yep. Healthy Pet? Yep. Pieous Pizza? Yep. Pie•e•tea Pastry & Coffee? Yep.  All small Austin businesses, all take Apple pay.  Shoot, when I'm slumming I can even use Starbucks cuz I put the Starbucks card into Apple Pay.  Cool.

    I always try to evangelize it and explain simply how safe it is and that not only is your card number not in the phone, it is not shared with the vendor.  Nor is any of your buying habit data shared.  Also cool.  Sometimes all I get is the "trout look" from people, but I'm used to that.  I was once described as the guy who, when asked for the time, tells you how to build a watch.  I often see eyes glaze over.

    pscooter63palomine
  • Reply 15 of 29
    artdentartdent Posts: 69member
    I used Apple Pay (Visa) more during a recent one-week trip to Australia than I have in the U.S. in almost a full year. 

    Worked in New Zealand also, to the apparent surprise of some of the merchants there. 
    calipalomine
  • Reply 16 of 29
    maclvr03maclvr03 Posts: 198member
    artdent said:
    I used Apple Pay (Visa) more during a recent one-week trip to Australia than I have in the U.S. in almost a full year. 

    Worked in New Zealand also, to the apparent surprise of some of the merchants there. 
    That's great.  So if I went there or Europe for example, could I use any of my cards in Apple Pay even if that country only only has one card issuer on board with Apple Pay.

    Kinda confused about that.  
  • Reply 17 of 29
    artdentartdent Posts: 69member
    maclvr03 said:
    artdent said:
    I used Apple Pay (Visa) more during a recent one-week trip to Australia than I have in the U.S. in almost a full year. 

    Worked in New Zealand also, to the apparent surprise of some of the merchants there. 
    That's great.  So if I went there or Europe for example, could I use any of my cards in Apple Pay even if that country only only has one card issuer on board with Apple Pay.

    Kinda confused about that.  
    Hard to say. My card is a U.S. issued Chase Visa if that helps. 
  • Reply 18 of 29
    friedmudfriedmud Posts: 165member
    Soli said:

    I've also encountered completion sounds with chip card readers that sound like a system error (CVS finally updated their readers to a more pleasant "ding" sound), and other places that use to not have you sign for small amounts with the card swipe now have you sign for any amount with the chip card. Since this does slow down the transaction, which can affect sales and customer satisfaction I've suggested their call their hosting company to see if they can get an update pushed that will forego the signing under a certain threshold. So far, nothing seems to have changed on that front, for the places I frequent.
    yes the "ERRNT! ERRNT! ERRNT!" sound at CVS was atrocious. further proof that nobody has any idea what they're doing, from the POST manufacturer who supplied the sound to the retailer CTO who okayed it. anti user. they're clueless. 

    That sound was to get your attention so you remember to remove your card.  But, I agree that it was a poor choice.

    I'm still surprised at the number of people that haven't ever seen someone pay with an Apple Watch.  I've had mine since launch - and it still gets comments when I use it (just did yesterday at Petco).

    I have one particular shopping string I do where  I can pay with the Watch at every store: Walgreens->Starbucks->Petco->Wilson's Farm (local farm).  One of these days I'm going to attempt to leave my wallet at home and try it :-)
  • Reply 19 of 29
    snovasnova Posts: 1,281member
    Was in Iceland for 2 weeks this past month. I used Apple Pay everywhere. I was shocked.  
    palomine
  • Reply 20 of 29
    slprescottslprescott Posts: 765member
    That statement amazed me:
      = "three out of four contactless payments in the U.S. are being made with Apple Pay"

    My employer's cafeteria now accepts it, which means I'll be able to use Apple Pay every day.  As more of these "every day" retail locations accept Apple Pay, the transaction volumes will rise quickly.

    Gas stations accepting Apple Pay will drive a big increase.  I already use Apple Pay at Exxon stations.  it requires their app -- which I know many of you object to -- but it's actually quite convenient and does support Apple Pay.
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