It’s been one year since Apple’s Apple Pay mobile wallet hit the market. Since that time, we’ve also seen the debut of Google’s Android Pay and, more recently, Samsung’s Samsung Pay. So how is Apple Pay faring, and what’s the general state of the mobile wallet market? Let’s take a look.
Merchant Acceptance:
Here’s the good news: Merchant acceptance of Apple Pay and other mobile wallets is on an upswing.
Apple Pay: According to Apple’s most recently released data, 700,000 merchant sites in the U.S. now offer Apple Pay as a payment option. And things seem to be heating up; during the Code Mobile conference in mid-October, Apple Pay Vice President Jennifer Bailey announced that some Starbucks stores will be accepting the mobile wallet as part of a pilot program.
At around the same time, Starbucks executives revealed that Apple Pay will be tested in some of the coffee chain’s stores by year-end and is subsequently slated for chain-wide acceptance in all 7,500 locations. Apple Pay-based payments have been accepted in Starbucks stores in Great Britain for the past few months, with a positive response from customers. Other heavy-hitters, like KFC and Chili’s, are planning for Apple Pay acceptance as well. Drug chain Rite Aid and carrier Jet Blue also recently jumped on the bandwagon.
Android Pay :Android Pay is accepted at more than one million stores across the U.S., and will soon be available in “thousands” of Android apps, according to the company. The list of merchants that process payments made with Android Pay includes some major players in a variety of vertical markets, including grocery (Acme, Bashas, and Jewel-Osco), hospitality (Jamba Juice, Peets Coffee & Tea), apparel and footwear (Babies R Us, Foot Locker), drug chains (Walgreens, Duane Reade), telecommunications retailers (T-Mobile), and others.
Samsung Pay: The fact that Samsung Pay, unlike Apple Pay and Android Pay, works with magnetic stripes as well as with near-field communications (NFC) technology means it can be accepted at more locations than the other two mobile wallet options. Samsung executives recently said the service can be used by Galaxy S6 Edge, Galaxy Note 5, Galaxy S6 Edge, and Galaxy S6 owners, making it an available payment option at 90 percent of retail locations in the U.S.
Consumer Acceptance:
Now for the less-than-entirely positive spin on mobile wallets.
Apple Pay: Research conducted recently by Gallup shows that customer adoption of Apple Pay hasn’t been as fervent as initially hoped. According to a recent Gallup poll, just 21 percent of iPhone 6 owners use their smartphones for Apple Pay transactions, and a mere 6 percent are “very likely” or “likely” to follow suit in the next 12 months.
Android Pay: Google, too, has yet to see a major Android Pay adoption wave, but is addressing the issue. The company plans to gradually push Android Pay to all devices running the Android 4.4 operating platform or higher, finishing up this task by year-end.
Samsung Pay: Samsung Pay adoption in its home country of South Korea has reportedly been quick, with more than 15 million transactions worth some $30 million processed with it in the first month. Samsung officials have told the press that “thousands” of users are signing up for the mobile wallet weekly.
But this may be short-lived given possible security concerns. One week after Samsung Pay made its debut, it was revealed that the company’s LoopPay subsidiary had several months before been the target of a sophisticated cyber-attack by a group of Chinese hackers. The hackers were said to be after the magnetic secure transmission (MST) technology that is a key element of Samsung Pay. Some experts believe the incident bodes poorly for Samsung in that its security fears among consumers will make it more difficult for Samsung Pay to compete favorably against not only Apple Pay and Android Pay, but smaller players elsewhere in the world, such as China’s Xiaomi.
Many industry experts say consumer adoption of Apple Pay—and Android Pay as well as Samsung Pay—will increase sharply as more merchants join the fray. Allaying consumers’ fears about mobile wallet security, educating them about mobile wallet usage and benefits, and enticing them with rewards will also push adoption forward. This time next year may present an entirely different picture—of Apple Pay and other mobile wallet offerings alike.
