US Insights

Apple Pay not adding up

Greg Flemming

SVP, Financial Services Group

Economy 08.24.2015 / 18:50

Apple Pay infographic

New Lightspeed FSG study highlights consumers’ slow adoption of e-wallets overall

When Apple Pay launched last year, the financial industry took note. On the consumer side of the business, we're quite used to Apple's larger-than-life launches and equally impressive market performance immediately following. But six months after Apple Pay's launch, the scenario might best be described as… over baked? Not quite ripe?

While our new Lightspeed Financial Services Group study shows an uptick in frequency of Apple Pay use for in-store purchases, security concerns and a general lack of interest have slowed adoption of Apple Pay and other e-wallet platforms.

Lightspeed FSG has been tracking the e-wallet industry since Apple Pay's launch last year. Among current Apple Pay users, 17% said in the new July 2015 study that they use Apple Pay more than 10 times a month for in-store purchases, up from just 7% in November 2014.

At the same time, there has been dramatically little growth in the percent of top bank customers adopting Apple Pay since its launch last fall - and even as Samsung Pay prepares to launch this Fall, interest in adopting mobile payments has stalled.

Only 25% of consumers who currently own a smartphone say they are interested in paying for things at stores using their mobile phone, slightly below the figure seen last November (27%).

Even as smartphone adoption proliferates, the biggest barriers to e-wallets today are persistent concerns about security and - with respect to Apple Pay - a large segment of consumers who see no need to acquire an iPhone to make payments.

Significant numbers of consumers say in the survey they are nervous about security or have not yet been convinced that an e-wallet will make their lives easier. Even among today's smartphone generation (consumers under age 35), only 27% say they are confident in the security of mobile payments.

So, how should banks, retailers, and agencies evaluate Apple Pay, Google Wallet and Samsung?  Our study also helps by providing answers to some critical questions, including: Which incentives will be most effective in helping banks and card issuers motivate e-wallet users to switch their default card in Google Wallet or Apple Pay? And, what are the top factors motivating consumers likely to adopt mobile payments over the next year?

Source: Lightspeed GMI

Editor's Notes

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