Adding Context to Other Tech Writers' Apple Pay Takes

Posted by Matt Birchler
— 3 min read

Regular disclaimer: I am a designer at NMI, a major payment gateway processing billions of transactions per year, and I hope to bring that expertise into any conversation that intersects with tech (this site's focus) and payments (my career). NMI does not know I'm writing this, opinions all all my own. 👍

Dave Mark on The Loop:

Pulling out that credit card is a tough habit to break. I think it’ll take a much bigger marketing push from Apple to change that ingrained behavior. Some sort of carrot, even a temporary one.

This is exactly right. Your card works 100% of the time, and if it was issued in the past couple years, it probably has NFC built in and can do contactless as well. Apple Pay requires new user behavior, and it needs to be way better in order to get people to change their behavior. Whether you think it is way better or not, usage shows for US consumers, in general it's not. That's something Apple needs to figure out if they want to continue to lead in this growing space.

Nick Heer on Pixel Envy:

[I]t seems remarkably low, especially for U.S. consumers. But there are some interesting takeaways from this survey, especially if you pair it with an analysis last February showing that around five percent of all card transactions worldwide were being made through Apple Pay.

It is low, and the rest of the world is way ahead of us when it comes to mobile wallet usage. But frankly, the US is always slower at adopting new retail payment technology compared to the rest of the world. EMV is still not universal and only started getting there a few years ago, all while being very old news in places like Europe.

If U.S. consumers are using Apple Pay infrequently, how does that square with the study from last year showing huge numbers of card transactions flowing through the service? Well, the PYMNTS survey does not cover the use of Apple Pay on websites or in apps, and I bet the latter represents an overwhelming volume. I would love to see a similar survey for online purchases.

Nick is right on here, e-commerce has a much higher Apple Pay adoption in both the US and the rest of the world. I linked to exactly the sort of survey he's looking for in my piece yesterday.

And finally, John Gruber on Daring Fireball:

If it’s true adoption is this low, I think one factor could be first impressions — my wife got turned off by Apple Pay in the earlier years because so many retail terminals that supposedly accepted it were so finicky. Using an old-fashioned credit card was more reliable.

Gruber also hits on the "my credit card just works" point, and he's spot on. Apple Pay was more finicky years ago, and that caused some trust issues both from merchants and consumers.

Close your eyes and imagine you walk into a store. You don't know anything about this business, you just know you want to buy something from them. What are the odds Apple Pay works? What are the odds your card itself works? Apple Pay has about a 70% chance of working, and your card has a 100% chance. 70% is pretty good, but most people are not passionate about payments, so they'll use the thing that's most reliable, and that remains a stupid slice of plastic.

As I said in my original article, I do think that mobile wallets are going to continue to grow, and the US will gain on the comparatively massive adoption we see in the rest of the world, it's just going to take time.

I actually think is story is a very good thing for us in the Apple enthusiast crowd to see, because I think most of us would have expected to see much higher adoption because "Apple Pay is obviously better than a card and I trust Apple more than anyone else, right?" Habits at scale change slower though, and it's good to be reminded of that from time to time.