The Good News: Building A Lead And Sticking To The Plan
More Competition Is Good News. Some might consider events like Google Wallet completing its transformation to Android Pay and Samsung throwing its hat into the mobile payments ring to be bad news for the months’-old Apple Pay. But it’s actually great news.
More major players placing bets on the wallet’s extinction will turn up the heat on merchants to add payment terminals that support the technology and expedite consumer education. With the necessary infrastructure in place, Apple can simply rely on the popularity of its phones to do the rest. How are Blackberry and the Microsoft Zune doing, by the way?
New iPhone Sales Cycle. Last October, when Apple Pay was released, only about 12 percent of iPhone users had models compatible with the service. That figure has increased to roughly 47 percent, and is expected to continue spiking thanks to the September 25 release of the iPhone 6s and the company’s newly unveiled upgrade incentives that promise to maximize 6-series penetration. More people possessing the ability to use Apple Pay obviously is good news.
Laying The Foundation For Micro-Merchant Adoption Growth. Commerce has become increasingly populist in recent years, as the ubiquity of intuitive technology and a recession-fueled entrepreneurship bubble have combined to create a new breed of single-person, smartphone-based businesses.
Apple’s recently announced partnership with PayAnywhere to create a mobile card reader that supports contactless payments reflects the company’s recognition of this important trend, and infuses a dose of competition into the space. Square also is expected to release an Apple Pay-compatible reader shortly after Apple’s version. Having more of these readers on the streets, no matter who makes them, will reduce barriers to Apple Pay adoption.
More Card Issuers Participating. In recent months, Apple has announced a steady stream of new banks and credit unions that will support Apple Pay: 59 in May, 12 in June, 35 in July and 64 in August. Now, Apple Pay has more than 400 financial institution partners overall. Some — including Wells Fargo, Bank of America and Capital One — are even doing the product’s advertising for it. None of that is bad news.
“Strong” Initial Adoption. The extent to which customers have taken to Apple Pay depends on who you ask. If it’s Ed McLaughlin, chief emerging payments officer at MasterCard, he’ll tell you that, “We are seeing strong uptake. But these technologies will take time to grow.” Considering that MasterCard accounts for 23 percent of the credit card market’s purchase volume and 30 percent when it comes to debit cards, this is an opinion that merits attention.
The Bad News: For Many, The Jury Is Still Out
Users Can’t Keep It Up. As everyday consumers have joined early adopters in enjoying Apple Pay access, usage rates have declined. The share of iPhone 6 users who say they use Apple Pay “every chance I get” has fallen from 48 percent in March to 33 percent in June, according to surveys by InfoScout and PYMNTS.com. What’s more, the percentage of people who say they “rarely consider” using Apple Pay increased from 17 percent to 23 percent over that same time period.
Some may ascribe this to the natural rhythms of a product launch, but a continuation of this brief trend would undoubtedly lead to more fervent calls for alarm.