Apple Pay’s Great Mystery: Why Apple Doesn’t Promote Its Advantages More

As Apple Pay’s global user base climbs to an estimated 127 million individuals, a mystery about why even more consumers don’t use Apple Inc.’s mobile-payment service confounds one researcher.

Loup Ventures, a Minneapolis-based venture-capital firm, on Thursday released its annual Apple Pay review. Among its findings is that the estimated number of global Apple Pay users increased 104.8% from 2016 to 2017, going from 62 million to 127 million. Still, only an estimated 16% of global iPhone users have activated Apple Pay, the firm said.

Loup Ventures also canvassed the top 100 retailers, according to eMarketer Inc., to gauge the level of Apple Pay acceptance. In 2018, 14% accept Apple Pay on their desktop e-commerce sites, 24% do so on their mobile-commerce sites, and 24% accept it in-app. All three have increased substantially from 2017, when just nine offered Apple Pay on desktop, 13 on m-commerce sites; and 22 in-app.

Many have wondered why mobile-payment services like Apple Pay, which launched in October 2014, have yet to gain even broader adoption. “The big picture was surprising,” Gene Munster, Loup Ventures head of research, tells Digital Transactions News. “The biggest surprise is that it is still nascent.”

That’s in spite of Apple “running the table” among the major mobile-payments services, which includes Samsung Pay and Google Pay (formerly Android Pay), he says. Apple did not respond to a Digital Transactions News inquiry.

It’s a bit of a mystery to Munster why Apple doesn’t promote Apple Pay more. The company does send e-mail marketing messages to users. A recent one, for example, offered free delivery with Instacart if paying with Apple Pay. But Munster looks for more reasons to use Apple Pay. “When you use Apple Pay, it’s an easier checkout,” he says. “[Apple] tends to get very aggressive around features.” While Apple often touts the iPhone’s camera quality or its ability to easily take a selfie, “they need to do the same [kind of] thing when it comes to payments,” he says. An example, he says, would be to stress how Apple Pay makes for a faster transaction at checkout.

“It’s a mystery why a company like Apple has this great product that they just largely left people to stumble upon,” Munster says.

The message may be better understood internationally. In August, Apple said 75% of Apple Pay’s transaction volume originates outside of the United States. Also, according to Apple, nearly 90% of all near-field communication payments on mobile devices are attributable to the service.

Merchant acceptance also has a role. “There are merchants who can accept Apple Pay at the point of sale because of the hardware they have, but don’t know it,” says Munster, who wants to explore why merchants don’t activate mobile-payment acceptance.

“Cash is going away and phones are going to become our wallet,” he says. “Even though 24% of the top 100 retailers accept Apple Pay, even though it’s disappointing today, the numbers will only go up in time.”