Apple has made a big commitment in developing mobile wallet technologies, but Apple Pay may take longer than expected to show return on the investment. This, according to a First Annapolis Consulting report on the awareness and adoption rates of Apple Pay, the technology giant’s foray into the mobile payment space. Potentially a useful tool in promoting customer engagement, mobile wallet technologies are slowly gaining momentum as an alternative to physical cards.
The report, “Updated Consumer Perspectives on Apple Pay,” was built from a survey of about 1,300 smartphone users. Of those, 580 are users of the iPhone 6, on which Apple Pay is enabled.
First, the good news for the iconic Apple brand: Apple Pay awareness is at a more than sufficient level. Almost 75% of those surveyed noted that they had heard of Apple Pay, and that number jumps to 84% when looking only at the iPhone 6 sub-group.
Now comes the bad news: Adoption (using the service at least once) is at only 20% of surveyed iPhone 6 users, according to the report. What’s more, just 15% indicated that they use the service more than once a month. While the low adoption rate isn’t surprising, given the behavioral shift being asked of shoppers, the number surely comes as a disappointment to Apple.
“At this point in time, the typical financial institution can expect 1% to 2% of cardholders to use Apple Pay two or more times, based on the survey results and Apple’s share of the U.S. handset market,” said Hugh Gallagher, Principal at First Annapolis. “This represents positive momentum for the evolution of the U.S. mobile payments market, but it also suggests a long adoption curve. Despite different stakeholder interests and mobile-related initiatives, most signs point to long-term success.”
Fortunately, there is certainly a silver lining to the slow adoption rain cloud. Compared to a survey in spring of 2015, the group of users that is “very satisfied” with the Apple Pay experience has grown to 60%, an increase of 7%. Most encouraging, not a single one of the 580 iPhone 6 users noted dissatisfaction with the service; 34% said they were “somewhat satisfied”; and only 5% said that they were “neutral” regarding the Apple Pay user experience.
The future is bright for Apple’s mobile wallet technology, but the path to success may take a little longer than anticipated.