Updated Consumer Perspectives on Apple Pay

Navigator Edition: January 2016
By: Hugh Gallagher

Recent First Annapolis consumer research suggests that only one in five iPhone 6 users has made a purchase with Apple Pay, and that the overall adoption rate for Apple Pay has plateaued from early 2015.

This finding, based on a survey of 1,279 smartphone users conducted in December of 2015, indicates that—while there is much energy and excitement surrounding mobile payments—actual consumer adoption and usage still has a long way to go.

Apple Pay Awareness & Usage

Awareness of Apple Pay remains quite high: 73% of all consumers and 84% of iPhone 6 users indicated that they have heard of Apple Pay. Awareness among iPhone 6 users is down from 88% in our Spring 2015 survey, but still within the survey’s margin of error.

Figure 1: Apple Pay Awareness
“Have you heard of Apple Pay, the new mobile payment solution from Apple?”

Figure-1_-Apple-Pay-Awareness_Source: First Annapolis Consulting research and analysis.

Of the nearly 600 survey respondents with an iPhone 6 (and therefore the ability to use Apple Pay), only 20% report having used Apple Pay at least once, down from 22% in the Spring survey but within the survey’s margin of error. Among those that have tried Apple Pay, only 15% say they use it regularly or frequently (i.e., more than once per month), compared to 19% in the Spring survey.

Figure 2: Apple Pay Usage

Figure-2_-Apple-Pay-Usage_Source: First Annapolis Consulting research and analysis. 

Most active users have loaded more than one card into Apple Wallet (formerly known as Passbook); respondents reported an average of 2.3 cards loaded in the December survey. 75% of cards loaded were general-purpose payment cards (41% credit, 30% debit, 4% prepaid), while 25% were proprietary retail store or loyalty cards (see Figure 3), which Apple began enabling only in the second half of 2015 (e.g., the Walgreens Balance Rewards Card).

Figure 3: Apple Wallet Usage

Figure-3_-Apple-Wallet-Usage_Source: First Annapolis Consulting research and analysis. 

Despite relatively few NFC-enabled terminals in the market supporting Apple Pay transactions, the physical point of sale remains the primary origination channel for Apple Pay purchases. Among those that have used Apple Pay, 66% report having made a purchase in-store, while 52% report having made an in-app purchase. Between April and December; however, there was a notable increase in the number of users who reported using Apple Pay for in-app purchases only. This increase in the proportion of in-app purchases is likely a function of the limited POS acceptance for Apple Pay, continued incidences of difficulty in completing POS transactions, and the recent integration with store/loyalty cards from national retail chains such as Walgreens, BJ’s, Kohl’s, and JC Penney.

Figure 4: Apple Pay Purchase Location

Figure-4_-Apple-Pay-Purchase-Location_Source: First Annapolis Consulting research and analysis. 

While adoption and usage for Apple Pay are low, those that have tried it have been generally satisfied with their experience. Among users, 60% indicated they are “very satisfied” with their experience and 94% are at least “somewhat satisfied”, up from 87% in the Spring survey.

Figure 5: Apple Pay Satisfaction
“Overall, how satisfied or dissatisfied are you with the Apple Pay experience?”

Figure-5_-Apple-Pay-Satisfaction_Source: First Annapolis Consulting research and analysis. 

Consistent across both surveys is the extremely low level of dissatisfaction. This is an important indicator of potential long-term success—although it is also important to acknowledge that early adopters of Apple Pay may be more likely to view the product favorably as they may already be consumers of other Apple products and have a positive relationship with the company.

Implications & Conclusion

Apple Pay adoption and usage are low, but customer experiences to date are positive; the latter represents an important first step towards longer-term adoption. That said, awareness and usage clearly plateaued over the course of 2015.

Based on these findings, factors limiting adoption of mobile payments need to be addressed, including the perceived utility relative to existing payment products and services, a lack of mobile application usage by some existing smart phone owners, and the limited merchant acceptance of NFC-based mobile payments.

Each of these factors will need to be addressed in order for Apple Pay to become more widely adopted. Payments innovations typically take a long time to gain market traction which implies that the plateau in awareness and adoption is most likely not a peak. We expect that awareness and acceptance will catch up to the hype in coming years.

For more information, please contact Hugh Gallagher, Principal,, specializing in Payments Strategy and Innovation.

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