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Phoenix Marketing International Releases New Data Revealing the Ongoing Challenges Surrounding Apple Pay

October 27, 2015

Rhinebeck, NY – Phoenix Marketing International (https://phoenixmi.com/), a global marketing services firm, has today released new data from their ongoing consumer tracking report on Apple Pay. One year later, continuing points-of-sale friction is retarding transaction potential. For a segment of the report visit: http://bit.ly/1LSeiYR .

Within the first four months of its release, the Apple Pay adoption rate (those linking any payment card to Apple Pay) surged to 11% of all credit cardholders (15% among smartphone owners).

Since that time adoption rate has climbed to 14% revealing a slowdown in the growth rate.  Higher adoption rates are shown among Millennials and Gen X’ers and, currently, these two groups account for 92% of Apple Pay users.

The slowdown in Apple Pay adoption was revealed in an ongoing Apple Pay tracking study conducted by Phoenix Marketing International.  In addition, the research uncovered several friction factors that are undermining Apple Pay usage growth.

  • Usage demand is there: Two-thirds of Apple Pay users have specifically asked if the merchant accepts Apple Pay.

  • Nearly half of Apple Pay users have expected Apple Pay to be accepted – only to find out that the specific store visited did not in fact accept Apple Pay.

  • A majority of Apple Pay users continue to encounter problems at the point-of-sale, including terminals that take too long to use, terminals that don’t work properly and cashiers who are unable to help.

  • A lack of customer support is another reason why adoption has been slowing. Apple Pay users tend to be confused as to whom they should contact when an error such as a double charge occurs. 40% of users needing support are calling Apple, but really do not know who to call. Ultimately, Apple and its partners have to be ready to handle issues regarding customer support.

The research also revealed the importance of customer support in maximizing the Apple Pay opportunity.  While many users don’t need help, Apple Pay wallet usage is not a ‘set it and forget it’ proposition for the 40% of users who needed to contact Apple or their card issuer.

“An influx of inbound inquiries from Millennial and Gen X cardholders creates an opportunity for card issuers to engage customers and differentiate the bank brand,” said Greg Weed, Director of Card Research at Phoenix Marketing International. Issuers are faced with new challenges to influence wallet position and differentiate benefits and services beyond those that are automatically delivered through the Apple Pay wallet.  Future growth still depends on marketers’ ability to differentiate the merits of digital vs. plastic card transactions.”

Most Apple Pay adopters go on to use Apple Pay, and Apple Pay users are by and large undeterred by friction. Most expect to add cards to the Apple Pay wallet and would like to increase their use of Apple Pay in the near future.

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