Apple Pay Usage Grows on Undisclosed Volume

by Raymond Pucci 0

The guessing continues on Apple Pay usage and volume numbers. As reported in the following article, Apple still does not reveal year-over-year growth, and plays it close to the vest on actual Apple Pay revenue and more specific payment transaction data.

Apple’s mobile payments wallet is growing quickly. The number of Apple Pay transactions in the latest quarter rose 450% from the same period a year ago, CEO Tim Cook said on Tuesday during a conference call with analysts about his company’s quarterly results.

The likely reason: Apple Pay expanded to a number of new international markets in 2016. It is now available in 15 countries including the United States, the United Kingdom, Switzerland, Canada, Australia, China, France, Hong Kong, Singapore, Japan, and Russia.

As usual, Cook didn’t reveal the number of Apple Pay users, revenue from Apple Pay, or the value of those transactions. In the past, Apple has said that one million new users sign up for Apple Pay each week.

Apple Pay debuted in 2014 as a way to let shoppers load their credit card and debit card information onto iPhones’ “mobile wallets.” Customers can then use either their iPhone (or linked Apple Watch) to pay at retail stores equipped with point-of-sale registers supporting near-field communication (NFC) technology, which allows for payments between smartphones and registers.

Apple Pay users simply place their phones or watches near the registers’ sensors for payments without having to swipe a card. Apple Pay competes both in the U.S. and internationally with Google’s rival service Android Pay and Samsung Pay. Apple makes money by charging a small percentage on each transaction.

Cook also revealed on Tuesday that Apple Pay is accepted at 20 million locations worldwide, including 4.5 million in the U.S.

No doubt that Apple Pay has signed on millions of iPhone users across many international markets. But sign-ups are one thing and usage is another. Consumers have their reasons for not using Apple Pay or Android Pay—among them are security concerns, fragmented merchant acceptance, and not enough NFC enabled POS terminals. The message to the mobile wallets is clear: if consumers are not interested or engaged through loyalty programs, marketing offers, or other incentives, they will reach for their plastic almost every time.

Overview by Raymond Pucci, Associate Director, Research Services Advisory Service at Mercator Advisory Group

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