Apple seems to have nailed it with Apple Pay; its users are already three times more likely to spend $250 or more than those on other services, the latest Retale survey claims.
Feel secure
Apple Pay users are more worried about losing their iPhone than data breaches (29 percent versus 26 percent), suggesting they feel secure with the system. Over one million credit cards were activated on Apple Pay within the first 72 hours of introduction, while around 5 percent of U.S. retailers already accept it.
PayPal is the most popular in-store mobile pay option (51 percent) with payment systems from banks as the second choice (21 percent). Apple Pay is already the choice of 10 percent of those surveyed, while, despite Android's dominant market share and three years of availability, Google Wallet is used by a pathetic 8 percent, Retale reveals.
Apple Vice President Eddy Cue knew his market when he went holiday shopping with KTLA Rich DeMuro using Apple Pay. He used his phone to pay for goods at a series of shops, and stressed the security of the system: "The number being given to the terminal is a one time number created only for that transaction," he said.
Big spenders
This sense of security means that while just 12 percent of the Retale survey group said they would be comfortable using mobile pay for a purchase over $250, iPhone users were three times more comfortable with this kind of spending.
The sense of security is driving use. Over 50 percent of in-store payments made at McDonalds burger joints were made with Apple Pay while Whole Foods processed more than 150,000 Apple Pay transaction in the first three weeks of the service. Walgreens mobile payments have doubled.
By 2019 more than $142 billion per year is expected to be spent using mobile payment services -- and other forces want them to succeed. Governments worldwide want to limit real cash transactions, allegedly to protect against money laundering. Meanwhile, banks and credit card agencies want to improve their fraud protection. Biometric tokenized payment services such as Apple Pay help achieve these goals.
Seasonal jollification
Retale claims 56 percent of US adults will be interested in using a mobile device to pay for a gift or other item in store this season. Nearly 30 percent of potential users are concerned about the privacy of mobile payment systems, but 53 percent of millennials have used mobile pay in-store.
This ease of use didn't come easy. “It took a lot of cooperation from various players in the payments ecosystem to make Apple Pay happen," said TSYS Director of Innovation, Katherine McClure. "This is what I see as one of the biggest achievements of Apple Pay -- it got groups that haven’t always worked together to do so with a singular goal."
Future shocks
More is yet to come, of course: Apple's decision to allow developers to integrate Apple Pay inside their apps means smaller high street retailers will soon be able to accept mobile payments without being required to spend significant sums on infrastructure -- your local shop will eventually offer its own app; you'll be able to place orders from home for later pick up from your family store. This is likely to help small retailers survive the endless erosion of their business represented by aggressive supermarket brands.
Apple evidently hopes to introduce Apple Pay to other nations. When it does, it has some interesting opportunities to craft new financial models, particularly in emerging economies where many don't have bank accounts.
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