The mobile-payments system, which marks its one-year anniversary this month, has failed to catch on with consumers, accounting for only one percent of all retail transactions in the U.S., according to researcher Aite Group. The service – which allows users to pay for purchases by tapping their iPhone, iPad, or Apple Watch on a device at cash registers – has suffered from a lack of promotion and limited number of terminals available in stores. Plus Apple Pay is only available on newer iPhones.
“People don’t know why it is they’d use Apple Pay,” said Jared Schrieber, CEO of InfoScout, a shopper-research firm. “They are satisfied with the current methods and they don’t know how Apple Pay works.”
Apple, which relies on new products to sustain growth, entered a nascent market when it introduced its mobile-payments system last year. A similar feature had been available in Google Inc.’s smartphones through Wallet since 2011, yet adoption was anemic, according to Bloomberg Intelligence. Like most things Apple, expectations were high for the payment service, which was seen as a potential rival to PayPal. In January, Apple CEO Tim Cook spoke of “momentum” for Apple Pay, which, he said, was “off to a very strong start” and being implemented by banks, credit unions, and numerous merchants.
Competitors have followed — Samsung Pay and Google’s Android Pay were both introduced this year — but the consumer hasn’t yet. Merchants who adopted the system say that demand has been tepid.
Several surveys back up the anecdotal evidence. More than 75 percent of iPhone 6 and 6 Plus users hadn’t tried the service as of April, according to a Kantar Worldpanel ComTech. In June, 13 percent of 1,500 people surveyed by InfoScout and Pymnts.com said they tried Apple Pay.
A more recent smaller survey of 500 iPhone users published in July by Auriemma Consulting Group did find that 42 percent of the respondents used it for in-app and in-store purchases.
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