Apple Pay Adoption is Likely to Escalate in 2016, Despite Low Rate of Growth

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by Polina Chernykh · 3 min read
Apple Pay Adoption is Likely to Escalate in 2016, Despite Low Rate of Growth
Photo: Sai Praneeth K/Flickr

According to the statistics uncovered by the analyst Gene Munster, the use of Apple Pay is expected to increase this year, although the adoption speed is still low.

The usage of Apple’s mobile payment service, Apple Pay, is showing comparatively low rate of growth in the US, says Piper Jaffray’s analyst Gene Munster. However, the system takes lead in terms of POS mobile payment volumes.

Although Apple Pay’s adoption rate fluctuates between only 10 and 20%, Munster believes the usage will rise in the upcoming months due to the integration of new features.

This year, the analyst says, we should expect new services from Apple, like in-browser and P2P payments. It was earlier reported that the company had already conducted negotiations with some banks regarding the possible launch of the P2P feature.

“While 2015 was the year of Apple Pay adoption at banks, retailers and in-app, we believe 2016 will be the year of new features for Apple Pay. We believe peer-to-peer will be an important feature to increase overall consumer usage and awareness of Apple Pay and see mobile in-browser payments as a significant addition to the Apple Pay addressable market,” Munster said.

The amount of banks supporting Apple Pay’s service is steadily rising. According to data, unveiled by Munster on Thursday, Apple Pay’s collaborations with banks reached 930, increasing from 515 in September. Since March 2015, the number of agreements with US banks has been showing a twofold growth every three months. This month, Apple added 58 companies to the list of its partners.

The number of apps accepting Apple Pay payments is growing too, although not at the same speed. In June 2015, Munster reported there were 50 apps supporting the service, but their amount grew to 70 ones in September. Currently, Apple Pay’s purchases are accepted by 131 apps.

Meantime, the rate of adoption among big retailers is rather slow. This month, the amount of stores accepting payments via Apple Pay totaled 98, while 27 stores announced their plans to integrate Apple Pay support in the near future.

However, the total number of POS locations is unknown as the analyst did not count small ones. Munster says the average number amounts to 1 million stores across the US.

Currently, there are growing concerns regarding the lowering iPhone sales. Some analysts predict the sales will continue to fall.

As Pymnts suggests, the app may have not justified Apple’s expectations. The company believed the app would significantly boost the sales of iPhone 6/6S, but it appeared that only 3% of users acquired the phone to get an access to the service.

According to Pymnts’s recent report on Apple Pay’s adoption, the service stimulates only .002% of purchases. Most consumers do not consider it’s worth upgrading the phone, what leads to decreasing sales. Besides, Apple lacks killer apps that would drive demand for the new device.

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Polina Chernykh

Polina is an undergraduate student at Belarusian State Economic University (BSEU) where she is studying at the faculty of International Business Communication for a degree specializing in Intercultural Communication. In her spare time she enjoys drawing, music and travelling.

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