One Year Later: The Significance of Apple Pay

Posted by Bethany Frank on 19 Nov 2015

global payments

It’s been over a year since Apple first launched its highly-anticipated mobile payments platform, Apple Pay. Since then, the initiative has seen mixed results. Although growth has been slower than expected, Apple remains hopeful about the product’s future.

NFC technology is now considered an industry standard, and most mobile phones manufactured today include this capability. Only the most recent iPhone models, however,  are equipped with the NFC technology necessary to use Apple Pay. This is a major practical limitation against the widespread adoption of Apple Pay, but one that will likely subside over time.

A bigger obstacle facing Apple Pay is the lack of knowledge about the product among consumers. According to a survey conducted by InfoSource and, only 15.1% of eligible Apple Pay users had at least tried the service by March 2015. The same survey showed the number of people who use Apple Pay “every chance they get” decreased from 44% in March 2015 to 33% by June. In addition, people who say they “rarely consider” using Apple Pay increased from 17% to 23% by June.

Although somewhat counter-intuitive, the rise in competition is one of the biggest positive signs for Apple Pay and the mobile payments sector as a whole. Several major retailers such as Walmart, Best Buy, and CVS are against accepting Apple Pay as a payment method in their stores. In an effort against credit card companies and high transaction fees, these retailers have joined efforts to develop a platform called CurrentC: the merchant-owned equivalent of Apple Pay.

With the lack of merchant support acceptance already a major roadblock for Apple Pay, CurrentC is likely to continue to pose a challenge as involved retailers have a vested interest against other mobile payment systems. A major difference between CurrentC and Apple Pay is the ability to redeem offers and participate in loyalty programs with the former. If Apple is serious about growing the Apple Pay user base, it will likely have to work with merchants to develop rewards programs to rival platforms like CurrentC.

Apple’s direct competitors have also thrown their hats into the mobile payments ring with the launch of Google’s Android Pay, a spin-off of Google Wallet, and Samsung Pay. All three systems allow consumers to make payments at the point-of-sale with NFC technology. If Apple Pay was really performing as poorly as some would argue, competitors likely would not have invested in developing products to rival it. With such big tech names pushing the envelope in payment technologies, it’s safe to say there are many who see the physical wallet as a relic of the past.

Despite notable challenges from big-name retailers, more retailers across the country are tuning into the new reality of alternative payments methods and accepting them at checkout counters. Apple Pay is now accepted in over one million stores across the United States and continues to gain retail partners as general attitudes towards mobile payment methods shift in the positive direction. Thanks to new agreements over recent months, Apple Pay is also partnered with over 400 financial institutions overall. An even bigger benefit for Apple is that some of these financial institutions market Apple Pay themselves, illustrating the strong market demand for new payment technologies.

Consumers are known to be cautious and conservative when it comes to adopting new financial products, but trends still indicate a positive future for alternative payment technologies. Companies like Apple are keenly aware of the challenges they face with products that seek to break consumers out of well-established routines. Financial companies, retailers, and technology companies alike, however, are all preparing for and adapting to a future of digital payments. The advent of options in the mobile payments space is a strong indication for growth in coming years.

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Bethany Frank Senior Marketing Associate Bethany specializes in content and events as part of Alacriti's marketing team. She's a graduate of Rutgers University and has a background in writing, broadcasting, and digital media. Fascinated by the intersection of technology and human nature, Bethany is out to explore what drives consumers in such a fast-paced, digitally connected world.

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