Apple Pay usage faltering due to limited awareness of the benefits, suggests study

apple-pay-adoption

Retail data analytics firm InfoScout has told payment industry conference PYMNTS R2 that the percentage of U.S. iPhone 6 owners who have tried Apple Pay fell from 15% in March to 13.1% in June. Usage has also fallen sharply among those who have tried the service. Surveying iPhone 6 owners who have previously used Apple Pay and were shopping in a store that accepts the payment method, the percentage using Apple Pay fell from 39.3% in March to just 23% in June.

Payment industry site Pymnts suggests that while the fall is in some ways unsurprising, Apple must also accept part of the responsibility … 

Author Ad Placeholder
Will only appear on redesign env.

The unsurprising element, explains InfoScout CEO Jared Schrieber, is that early adopters of the iPhone 6 were techier users.

“As more and more people buy iPhone 6’s, we are seeing a lower percentage of them adopting or trying Apple Pay. That shouldn’t necessarily be a surprise as we move from people who are early adopters and more likely to try things, to later adopters who are not,” Schrieber noted.

But Apple has also failed to educate mass-market consumers, either about the security benefits offered by Apple Pay, or how to use it.

“People don’t understand why it is they would go about using Apple Pay, they are fine with what they have. And they are not familiar with how they would use Apple Pay if they wanted to,” Schrieber noted.

Others at the conference said that habit was also hampering growth of Apple Pay.

“We’re competing with 50 years of muscle memory and if we’re just swapping a swipe for tap, you’re only going to get the nerds like me to jump on board,” said Paydiant’s Chris Gardner.

LoopPay’s Will Graylin added that “merchant acceptance wasn’t there from the beginning, and it is very hard to build a sticky system if there is no place for consumers to get in the habit of using it.”

Apple is working hard to increase adoption of the service, recently adding 40 more banks and credit unions to bring the total number of financial institutions in the U.S. supporting Apple Pay to more than 400. The service also went live in the UK last month. Adoption by merchants of contactless terminals is also likely to increase as banks roll out next-generation payment cards which require updated terminals, with these expected to be in widespread use by October. Lastly, the survey’s conclusion is somewhat countered by another recent piece of research by Auriemma Consulting Group, which found that usage was on the rise as availability expands.

Via AI

FTC: We use income earning auto affiliate links. More.

You’re reading 9to5Mac — experts who break news about Apple and its surrounding ecosystem, day after day. Be sure to check out our homepage for all the latest news, and follow 9to5Mac on Twitter, Facebook, and LinkedIn to stay in the loop. Don’t know where to start? Check out our exclusive stories, reviews, how-tos, and subscribe to our YouTube channel

Comments

  1. Danielle Hallett - 8 years ago

    I suspect there is a chicken and egg thing here too. Before Apple start really pushing the service they need to ensure everyone can, the drip drip approach will iron out the kinks in third party services before it becomes ‘turn-key’.

    Apple Pay is new in the UK and everywhere I’ve used it, I swear the cashier has never seen anyone pay with a phone before.

    • vinokurovalexey - 8 years ago

      True. Tried to pay with ApplePay a couple of times in store. It takes to much time to explain cashier what you want to do. Taking contactless credit card out of the wallet is so much faster.

      • That could very well be the case. In America, we don’t have contactless cards though, and many places are just now starting to use chip and pin cards, I just got my first chip and pin cad in January.

      • Vladimir Burmistrovich - 8 years ago

        They’re not going chip and pin in the US, they’re going chip and signature. You get the benefits of the chip, but you still don’t need to put in a pin. I have yet to see a place where chip cards actually work though, even if they have newer terminals where you can put in a card with a chip, I’ve never seen it enabled, and if I try to put it in, nothing happens and I still have to swipe.

        Also, there are places where they accept contactless payments but if you try to pay with your phone, the cashier starts screaming at you and telling you it won’t work and refusing to allow you to pay until you swipe a regular card. Thus a few of these interactions and people just stop trying to pay using the phone and will just pull out and swipe a card as that works everywhere.

      • Siva Subramaniam - 8 years ago

        Ironically, Walmart has terminals that use the chip. Most other stores have them disabled including Target and Publix (grocery).

  2. Inaba-kun (@Inaba_kun) - 8 years ago

    Apple Pay is anonymous in the extreme in the UK. I’ve seen an Apple Pay logo on the window of a Nandos, but that’s it. The illogical £20 limit per transaction and the general lack of contactless payment terminals make it an even harder sell.

    I’ve used it a few times and the sales assistants are indeed amazed that you can buy things with a phone, but we’re many years away from it being a credit card replacement.

  3. Ian F. Bell - 8 years ago

    I use it when ever I can, I like the convenience of using it since I already have my phone nearby. One thing they need to do is make it more prominent at the devices. It is not always easy to tell if they do or do not. Also as an earlier commenter mentioned they need to have a sign available on the store front. Maybe the apple stores themselves should have at least one terminal so people can make a payment with it.

  4. kittykatta - 8 years ago

    When Apple wants more users for its music services then they create deals with artists (and stage controlled conflicts with pop stars) in order to gain popularity and awareness.

    I’m curious why Apple doesn’t use this method with Apple Pay. Some retailers may be excited to jump on the opportunity to participate but for those who resist then can’t Apple simply pay them or offer incentives to attract big names?

    If Apple wants Apple Pay to succeed then it would seem that more effort (and money!) should be invested into making it more widespread. Because the way it is now then I love the idea but I don’t use it since so few retailers offer it.

  5. Oflife - 8 years ago

    Well what do you expect? 1. It’s pretentious to place a £300 to £725 device on a payment terminal, akin to waving a wad of equivalent cash in front of the cashier. 2. It’s asking to be mugged the second you leave the store and turn into the side street, where thief who was standing behind you knows you’re armed with at least £800 of shiny gear.

    I’ve been saying since day one (1990s!), the only way to do safe convenient transactions is eye based biometrics. Look and you shall spend.

    • driverbenji - 8 years ago

      how is it different than waiving a credit card with $x000 limit? If you don’t want to get you phone out at checkout, do you keep it in your pocket/purse 24/7? That’s just silly.

      1) the card gets lost or stolen, it can be used right away. You might be able to cancel it, but, the thief will still get whatever he buys, the bank & merchant may get $ or write-off. But, you have to deal with canceling and getting a new card.

      2) if your iPhone is stolen, they will not easily be able to use it, and won’t be able to use apple pay at all, since that requires your finger for touch ID, can’t override it. It’s very hard to break into an iPhone without your apple id & password. You can use find my iPhone to erase it.

    • Inaba-kun (@Inaba_kun) - 8 years ago

      You act as if smart phones are rare. Everyone has one now. They may not all be iPhones, but I see a heck of a lot of high end Samsungs, HTCs, and Sonys.

  6. cseeman - 8 years ago

    I use different cards for different types of purchases to make my book keeping easier. Discover Card still not on the list. Not entirely confident in switching between cards and knowing the right card is being used. Too many stores (supermarkets) don’t use it and it’s not in use for small retailers and independent shops. The whole thing is messier than simply pulling out the correct card from my wallet. In short, it’s not actually easy or convenient to use.

  7. jsmallz - 8 years ago

    Would be nice if all the terminals were in so I could just not use my card. I only use Apple Pay at 1 store particular because Ive had my card data stolen or used from there multiple times over the years. Apple Pay in all stores please!

  8. Marklewood at Serenity Lodge - 8 years ago

    I’m still waiting for my two banks to come on board.

    • This. I have been waiting for my bank to come on board since the inception of Apple Pay, if they did I would be 100% more inclined to use the service. I check every time they release a new list of banks. My bank in particular just updated their entire system and yet didn’t include Apple Pay in that “upgrade”.

  9. yojp - 8 years ago

    I use it with my Apple Watch anytime I can, but rare to find a store that accepts it.

    Anytime I do a McDonalds drive-thru, I ask for “Apple Pay” and they add a dollar and give me an Apple Pie.

    Jim in Boulder

  10. Erik Bock - 8 years ago

    I see more and more places putting in the contactless terminals all the time in my area of the U.S. I think many because cards are going to smart cards finally. I would love to use ApplePay but my Bank does not yet support it

  11. Soluble Apps - 8 years ago

    You do now see Apple pay logos at places like McDonalds drive thru windows, but in practice you can use it in more places than not.

    Removing the £20 limit would help. I see its going up to £30 everywhere in a month or two, but it is also unclear which of Apples “Launch partners” have no limit.

    • Soluble Apps - 8 years ago

      and by the way, using from the Watch is really good.

    • Inaba-kun (@Inaba_kun) - 8 years ago

      This is one of the biggest problems. Is there a £20 limit on “official” Apple Pay transactions, as opposed to contactless? It’s completely opaque.

      I asked my bank and they told me that some retailers have a limit, and some don’t. Well thanks for that, it really clears up the confusion.

      • PhilBoogie - 8 years ago

        What exactly is it that makes you confused?

  12. PMZanetti - 8 years ago

    No kidding.

    There is absolutely no awareness of the product whatsoever, including in the retail partner stores. And the number of retail partner stores is still impossibly small. Every month we read about the latest 100 banks Apple has added to ApplePay…which means absolutely nothing in terms of its real world adoption.

  13. border1ine - 8 years ago

    I don’t use Apple Pay much because there are so many issues with retailers. In stores such as CVS that are still part of the ‘CurrentC’ thing, they have the contactless terminals, but if you try to use Apple Pay, it will go through the process and fail. There are several stores that I go to that have contactless terminals that behave this way. Then, at some retailers that support Apple Pay, they don’t have it at all registers, that happened to me at Panera. And, yet another problem is that when you use it at some other places the pay screen comes up. And you try to do the transaction, but it will fail because the cashier didn’t push some button on the register. So, the whole thing has to be repeated again. And annoyingly, some places still require a signature too The only time where I have had 100% success is at vending machines that display the Apple Pay logo on the machine.
    The system works great when you cut out whatever bs the retailer does. It is way too hard to keep track of which place has which problems, and it is way faster to take out my credit card and be done with it.

    • aaronh - 8 years ago

      Was coming here to say the exact thing. McDonald’s is generally the only place I know it will work. So many other places are clueless that if it DOESN’T work instantly it takes longer than just swiping your card.

      I’ve always said that for a user the only thing worse than something that never works is something that almost always works. While Apple Pay isn’t anywhere near “almost always” working, it’s the same problem. Because I don’t have faith that it will work I avoid it unless 100% certain.

  14. John Smith - 8 years ago

    I’m very keen on apple-pay in the long term

    – only having to carry a phone (not a separate wallet as well)

    – added security (touch-id/remote wiping/find my iPhone) comparative even a chip & PIN card.

    Weakness at this time?

    Limited to £20/£30 – I still have to carry the card as well.This is the big one they need to sort ASAP.

    From my bank, effectively I have to get a card with contactless capability – replacing my secure chip and pin card with one which has zero security … lose it and it can be used by anyone … no PIN, no fingerprint, not even an old school signature. Thats a step backwards in security, not forwards.

    Long story short – for me it has advantages in the future but not so great at this time.

    • Inaba-kun (@Inaba_kun) - 8 years ago

      Even if the £20 limit was gone, there is still a huge issue with the lack of store which accept contactless/Apple Pay. Tesco, Asda, and Sainsburys have at best embryonic support for contactless, so you won’t be doing your weekly shop with your phone anytime soon.

      How long until you can walk into a restaurant and pay with Apple Pay? I’m talking of real restaurants here, not chains.

  15. driverbenji - 8 years ago

    on another website this article claimed some were not using apple pay due to security issues…that’s a crock of ****…In fact, the whole idea of this article is based on percentage of users over all the iPhone 6/6+’s apple has sold, well, not everyone will use it, but, I am willing to bet the actual number of people using it has gone up considerably.

    There are some issues, as others have already commented, the biggest one is not being able to use it at most places still, or it not working right. Fortunately, merchants have to update to NFC and chip & pin acceptance by end of the year.

    But, as others have said, sometimes a signature is still required, which needs to change, Touch ID is my signature and if that isn’t good enough, too bad, these old rules about having to have a signature on file is outdated. Still, using apple pay and singing is easier, and more secure than getting my card out.

  16. Gene Lowinger - 8 years ago

    I have a 5c iPhone with no Apple Pay. But I can and do use it through my iWatch. Apple should survey more than just iPhone 6 users.

  17. dave93108 - 8 years ago

    I like using Apple Pay when I can. My biggest problem is that every time I update IOS, all of my credit and debit cards need to be reauthorized by the issuing bank. This generally means a phone call with long wait times. As updates have been more frequent recently, I’ve just abandoned the whole Apple Pay thing. It would be nice if the cards didn’t have to be re-authorized with each update.

  18. I don’t know what people are talking about when they write “I don’t use Apple Pay much because there are so many issues with retailers.” What problems? The retailer either accepts it or they don’t. If it’s supported, there’s nothing different that the retailer has to do, you don’t know even have to mention your payment method to them in the same way you don’t have to say “I’m using a Visa card.” I did have one instance where my local small grocery chain just gained support for ApplePay: “Wow. Do you now have Apple Pay?” The cashier said “Yes, but it doesn’t work. Someone just tried it.” I said, “Let me try it, maybe they were doing it wrong.” And it worked fine and I took the time to educate the cashier how it works. No big deal.

    I use ApplePay everywhere I can. Luckily 3 of the 4 grocery stores I use accept it: Whole Foods, Nugget, Trader Joes. Safeway still doesn’t handle ApplePay as they continue to hang on to ancient payment terminals. Since most of my purchases are groceries, that means I’m using ApplePay as my predominant payment method. And yet, I continue to hear these stories where people claim it doesn’t work when they try it and they give up. I just don’t get it. It’s worked every single time for me. I will add that it is annoying that sometimes you are still prompted for a signature when using a credit card (this has to do with the max limit the retailer has set for non-signature required transactions). As for all of the prompts when using a debit card…well, that’s to be expected: debit card transactions require a PIN (as always) and those transactions also support cash back (as always) so you have to be prompted for them; however, you will not be prompted if the retailer doesn’t support debit cards and processes the transaction as a check card (VISA/Mastercard) instead and that’s a specific quirk to how the U.S. system works (no other country I know of combines debit cards with a PIN-less debit system).

    • border1ine - 8 years ago

      I posted before, and the places that I go to frequently always seem to have some little issue that makes it easier just to take out my card. When I go to a retailer with good support, such as Whole Foods, it works every time.
      For example, this has happened to me multiple times at Sephora. The cashier rings me up, then the ‘Tap to Pay’ is displayed on the terminal. I run through the Apple Pay process, and it usually fails. The cashier does something and it works about 90% of the time the second time.
      Each retailer that I go to tends to have tiny idiosyncrasies that make it a pain to use Apple Pay. And sometimes the transaction will still fail because of something on the retailer side and then I have to take out my card anyway. It becomes a game where I have to remember how it works at each store.
      This has a lot to do with the fact that NFC payments haven’t really caught on until Apple Pay, and the process isn’t as nailed down as a card swipe. But, have been having similar problems with retailers that switched to chip readers. These are all teething problems of something new, the card swipe has been here for a long time and has been refined over the years to be pretty seamless. Eventually these problems will be ironed out and Apple Pay and other NFC payments will also become seamless.

  19. tmrjij718 - 8 years ago

    Went to Harris Teeter the other day. Used Apple Pay on the terminal and the cashier was able to accept it and print out the receipt, easily. It was so nonchalant for both of us. I didn’t even know if they were supported or not. Why can’t other stores just get a clue?

  20. Michael Kobb (@mjkobb) - 8 years ago

    If it’s faltering, I suspect it’s because it doesn’t work the way it was claimed to work. I try ApplePay everywhere that supports it. So far, exactly two locations have functioned the way Tim Cook’s demo did (i.e. without any extra steps): McDonald’s, and my local Mollie Stone’s grocery store. Everywhere else has either asked me for a PIN and the usual litany of “cash back?” questions, or I’ve been asked to sign something. I think Mollie Stone’s asks me to sign if it’s over $25. So that takes away a huge part of the convenience.

  21. Bryan Hough - 8 years ago

    I know at least 9 people with the iPhone 6 and NONE of them have ever used Apple Pay. I think only ONE of them has even ever tried to set it up. I don’t know why people are afraid of technology. And every time I use it, the cashier will say “you’re the only person I’ve ever seen do that”.

  22. Don Smith - 8 years ago

    My issue with Apple Pay is that most places I could use it….they don’t have the terminal….I have always thought that some of the $200B could be used with subsidzing new terminals for the major retailers….instead of waiting for them to get around to it

  23. acjeffers - 8 years ago

    Not using it because of very limited options to use it.

  24. I’ve tried to several times in a Trader Joes and it doesn’t live up to the ‘simplicity’ promise. What I want is to pull out the phone, TJ’s machine recognizes it’s there, shows me the total on my phone, I thumb the fingerprint thing — and it’s over. There are, instead, more steps that I don’t entirely recall. I think I have to okay it on TJ’s machine and then sign something. If that’s the case for good, it’s faster to swipe the card.

  25. Jim Byars - 8 years ago

    It’s hard to find a store that actually takes it. It is great that my cards work with apple pay but thats about it. The rest is a bust.

  26. taoprophet420 - 8 years ago

    With more and more retailers getting chip terminals and most opting for chip terminals that also support NFC most retailers should support it soon in the US. The banks are liable at the end of the year for fraud if they don’t offer chip and signature cards. This makes the US a prime candidate for Apple Pay with stores updating there terminals to support EMV cards and usually adding NFC along with the new EMV terminals.

    I think royalty card rewards will also help retailers and give consumers more of a reason to use Apple Pay.

    I still think the global rollout is way to slow and is nothing for credit card companies to support Apple Pay at existing NFC terminals. The technology for Appe Pay is not new.. Just the right intervention is new.

    Apple needs to offer more training to partner retailers so users better. Ow what to do and if the business accepts Apple Pay.

  27. I think a lot of people are missing the point of Apple Pay. Yes, I wish that it could be faster at some places (not having to press “credit” or “debit” buttons or not having to sign a receipt) but Apple Pay is so much secure than just swiping a credit card that I try and use it wherever and whenever I can. That is more important to me than having the transaction go more quickly. I don’t see a big difference between pulling out my phone (or using the Apple Watch), holding it to the terminal for two seconds and then having to press those same buttons and sign if they have me sign vs pulling out my wallet, taking out the credit card,swiping the card, pushing those same buttons and signing. The only difference really is that is much, much more secure. And when it works like Tim Cook showed it and there is one step (like at McDonald’s) then all the better. But like I said before, I would rather have a transaction be more secure than have to pull out my card and do possibly the same amount of steps or less.

  28. AbsarokaSheriff - 7 years ago

    In the US, we’re supposed to go to Chip and PIN credit/debit cards by October 1. Apple Pay is a form of Chip and PIN, uses the same EMV protocol but is much more secure. However, I have used Apple Pay 200 times roughly and have had to use a Chip and PIN card only twice, once when experimenting and another time when the credit card reader refused my swipe and said I had to insert.

    Both transitions are going slowly EMV and Apple Pay but making some progress. The fact that AmEx Corporate Cards, Rite Aid, Pei-Wei Dunkin Donuts. Discover in the fall are indicating more opportunities for usage. Along with Android Pay eventually being released. The more users, the more awareness.

    For most of my shopping, Whole Foods, Target App, Macy’s, Trader Joe’s, Sprouts, I am able to use Apple Pay.

    So yes, it’s not taking over the world just yet but the growth in merchants and banks is coming.

    I do agree Apple needs to do more to increase awareness.

  29. Mark Fuller (@kcwookie) - 7 years ago

    This is a non story that has been pushed around like Jesus himself published it. Digging deeper into this story, I found that some of the numbers quoted here where from consumer studies and the nowhere was the margin of error published. The problem with statistic is that most who quote them don’t keep them in context. My argument is that changed (up or down) as minimal as this are more likely statistical aberrancy and not a real trend. The product is less than a year old, limited to only new hardware, and is not accepted country wide. I highly doubt that any of these variables and a host of others not mentioned were controlled for when the original work was written.

    One of the best axioms of life is that there are lies, damn, lies, and statistics. One other of my favorites is that there is not common sense, only good sense, bad sense, and no sense, the latter reigning supreme.

Author

Avatar for Ben Lovejoy Ben Lovejoy

Ben Lovejoy is a British technology writer and EU Editor for 9to5Mac. He’s known for his op-eds and diary pieces, exploring his experience of Apple products over time, for a more rounded review. He also writes fiction, with two technothriller novels, a couple of SF shorts and a rom-com!


Ben Lovejoy's favorite gear