Much like many Apple innovations, Apple Pay did not reinvent the wheel for mobile payments, but just presented the concept in a unique way that captured the interest of many prospective users. While numerous mobile wallets existed prior to Apple Pay, Apple was one of the first companies that had both a significant share of the smartphone market and the brand clout and marketing muscle to draw some attention to mobile payments.
Now, the only question is: Does Apple really have the ability to transform the mobile payment space? All eyes are on Apple Pay in its opening months, and ITG Investment recently conducted some deep research onto whether it’s gained any traction. Some of the initial findings include:
- Apple Pay is seeing recurring use: As many as 60 percent of Apple Pay users leveraged the wallet multiple day in November. When looking at other popular payment applications, such as PayPal, that figure is closer to 20 percent. That means not only are people finding the mobile wallet useful, they are actively turning to it when they need to make payments. While some of this stickiness could be chalked up to the relative newness of Apple Pay, it at least bodes well for the fledgling mobile wallet.
- Apple Pay is being used frequently by adopters: Apple Pay users reported utilizing the wallet approximately 1.4 times per week. Additionally, they were extremely likely to use it when making recurring payments at the same retailer. Again, this shows that people are not just using it a couple times a month, but actually a few times a week and maybe more often than that at particular merchants.
All in all, Apple Pay is still slowly growing, but it shows incredible potential as a mobile wallet. When considering the fact that Apple Pay is only available to users of the latest Apple hardware and is only supported by a small number of merchants, it is quite feasible the mobile wallet could grow. If more people get ahold of technology that can run Apple Pay, and more merchants incorporate it into their POS systems, Apple could realistically become one of the leading mobile payment solutions.
Accepting mobile payments at the point of sale
To be clear, we don’t expect mobile payments to take over any time soon. In fact, an economist from the Federal Reserve Bank even recently pointed out that many people still consider mobile payments a novelty. In the eyes of many, mobile payments do not compete with cash or payment cards - smartphone-based payments are just a unique way of paying.
However, that doesn’t mean that merchants, hotel chains, restaurants and other consumer-facing companies should be ignoring mobile payments. Flexibility is not only a core component of customer service, it may help firms drive sales and create brand loyalty in the long run. Enterprises want to be able to serve customers no matter what, and offering mobile payments simply allows brands to give customers more options.
Think of it like this - how many sales do cash-only businesses miss out on due to their inability to accept electronic payments? The answer varies depending on the merchant, but regardless of the vertical in question, the lost busienss is almost always significant. Accepting credit and debit cards gives brands another avenue of serving customers. Mobile payments offer yet another means of serving additional customers.
Mobile payments may not be replacing other forms of payment soon, but businesses that don’t have the option to pay by mobile may be alienating an albeit small, but growing percentage of future consumers.