Apple Pay recently celebrated its first birthday and has paved the way for adoption of mobile wallets. When first released, only 12 percent of iPhone users had compatible models to use the service. Now, approximately 47 percent of iPhones have Apple Pay compatibility, which is expected to grow even more with the latest iPhone 6s model release. Apple Pay has already reached many milestones, but how is it expected to pan out during 2016?
Let’s take a further look at what’s next for Apple Pay this year:
More In-Store and In-App Purchases with Merchants
Phoenix Financial Services examined which retailers support Apple Pay and how often their customers were operating it. They discovered that 91% of Apple Pay users made an in-store payment using their stored credit card within their smartphone and 67% used an in-app transaction. Brick-and-mortar merchants had the most traffic of Apple Pay credit card users.
Here are the top retailers that accepted at least one in-store Apple Pay transaction:
- McDonalds: 38% of Apple Pay users
- Macy’s: 36% of Apple Pay users
- Subway: 32% of Apple Pay users
The top retailers that accepted at least one in-app (mobile) Apple Pay transaction included:
- Apple: 43% of Apple Pay users
- Target: 36% of Apple Pay users
- Nike: 29% of Apple Pay users
“The push toward enabling in-app mobile wallet transactions is critical to building volume in a nascent market where the number of acceptance locations is relatively small but growing and the incidence of reported friction at the point of sale is high,” says Greg Weed, director of card research at Phoenix Marketing International.
More Rivalry Will Be Beneficial
One may think added competition against Apple Pay, such as Android Pay and Samsung Pay, would be a negative sign of what is to come. However, more major players are actually a positive for the future success of Apple Pay. Added rivalry will assist in getting merchants to upgrade their payment terminals to support mobile wallet technology as a whole and ultimately lead to more sales.
More Expansion to Other Countries
At launch, Apple Pay was accessible at over 200,000 merchants within the U.S. Fast forward to today, and Apple Pay is supported at over a million U.S. stores that have the capability to accept contactless payments.
“We’re off to a great start and we are seeing continued, double-digit monthly growth in Apple Pay transactions since launch," Apple said in an e-mailed statement. “And our customers love Apple Pay – a recent survey found satisfaction rates of 98 percent. Merchants love it too and tell us that the added security and convenience Apple Pay brings their customers is a huge benefit.”
Other countries are beginning to gain support so they too can begin accepting Apple Pay. The UK launched Apple Pay in July of 2015, and it has been an easy transition for merchants as most already had the infrastructure to accept it. In fact, over 69 million contactless terminals were already implemented in the UK when Apple Pay was launched.
“The pace of growth we are seeing in contactless is getting ever faster as we rely less and less on cash. Consumers enjoy the speed and convenience of tapping to pay. We expect this upward trend to persist with consumers continuing to migrate to contactless card payments and increasingly to mobile payments, as we work with partners such as Apple to enable more convenient ways to pay,” said Mark Barnett, President of MasterCard UK and Ireland.
Apple Pay has led the way for mobile wallets and will continue to increase in acceptance in the future. Consumers will begin utilizing Apple Pay for both in-store and in-app purchases with merchants and the addition of other key players in the mobile wallets spectrum will push more merchants to adopt payment terminals that accept mobile wallets. Other countries will also begin supporting Apple Pay, as it continues to spread around the world in popularity.
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