US: Apple Pay fails to catch on with consumers
13.10.2015 380 views
Apple’s mobile-payments system, which marks its one-year anniversary this month, accounts for only 1 % of all retail transactions in the US, according to researcher Aite Group, cited by Bloomberg.
The service, which allows users to pay for purchases by tapping their iPhone or Apple Watch on a device at cash registers, has failed to catch on with consumers for several reasons, adds the source. Some reasons include the lack of promotion, limited number of terminals available in stores and the fact that Apple Pay is only available on newer iPhones. In addition, Apple faces competition from Samsung and Google which launched similar mobile payments services - Samsung Pay and Google’s Android Pay were both introduced this year.
Some examples given by the source explaining why Apple Pay is to a standstill at the moment include the situation of Panera Bread Co., one of the retail locations where Apple Pay is live. Apple Pay rolled out here last October and currently the service accounts for “low single digits” of the restaurant chain’s in-store transactions, according to Blaine Hurst, Panera’s chief transformation and growth officer. It represents about 20 % of transactions on Panera’s iOS app, which lets patrons place orders right from their phones, Hurst said. Customers can use certain iPhones and iPads to pay in apps. Another example - at the Firehouse Subs chain, which introduced Apple Pay in January, the service makes up about 2 % of all transactions, said Vince Burchianti, chief financial officer of Firehouse of America LLC.
Several surveys back this information - more than 75 % of iPhone 6 and 6 Plus users hadn’t tried the service as of April, according to a Kantar Worldpanel ComTech. Moreover, another survey highlights that 42% of US Apple 6/6+ owners reported having used Apple Pay, virtually identical to the proportions reported in two previous waves of the study conducted in February and April 2015, according to the 'Apple Pay Tracker' report issued by The Auriemma Consulting Group (ACG).
Despite the low numbers, Apple’s statement remains strong: “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.”
The good news is that Apple will get some help this fall as more retail stores install terminals that accept Apple Pay. Credit-card networks have set an October deadline for most merchants to upgrade their systems to comply with a chip-based smart card standard known as EMV - for Europay-MasterCard-Visa. Those terminals also accept mobile-payment systems like Apple Pay.
The switch to chip-based cards from magnetic-stripe cards in the US may also accelerate Apple Pay’s adoption. Because the EMV chip cards must stay inserted in in-store payment terminals for the duration of each transaction, instead of being swiped, checkout times may be longer and the process more cumbersome. It could push consumers to embrace mobile payments - and Apple Pay.
Source: The Paypers
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