Apple Pay users running into checkout problems - survey

Apple Pay may be boasting impressive adoption rates but two thirds of people who use the system have run into problems at the checkout, according to a survey from Phoenix Marketing International (PMI).

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Apple Pay users running into checkout problems - survey

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

Launched to much fanfare last October, Apple Pay has been widely credited with giving mobile payments the push they needed to finally hit the mainstream. By February JPMorgan Chase was reporting that over one million of its customers had uploaded their cards to Apple Pay and were actively using the service to make payments.

Of 3002 credit cardholders surveyed by PMI, 11% have used Apple Pay, with the figure jumping to 66% among iPhone 6 owners. Most adopters - 82% - are linking credit cards, although more than half are also adding debit cards.

Apple is seeing unusually high usage conversion rates, with 88% of those that bother to set up a wallet going on to use it. However, repeat usage figures are less impressive, with 48% of people using the system just once, in part because of problems faced by customers when they try to make payments with their iPhones.

Nearly half of those surveyed have visited a store listed as an Apple Pay merchant only to be told that they could not use the system. Even though Apple Pay users generally rate it highly, two out of three have had problems, usually related to terminals not working or taking too long, or store staff not being able to help with queries.

Greg Weed, director, card research, PMI, says: "Since Apple Pay is still in an introductory mode and the NFC acceptance network still has a long way to go, adding a continuously updated ‘local store directory’ to the Passbook app is a necessary, short-term product improvement."

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Comments: (7)

A Finextra member 

My wife will use anything Apple provides - he is anxiously awaiting a watch... However, if Apple cause her problems at the checkout, no amount of Apple love will convince her to use it again...  we have seen this a lot since the Internet started, if things dont work first time then dont expect customers to come back any time soon.... This was a high risk, (relatively) low revenue play for Apple... it remains to be seen if it will come off,  i tend to think not, as Contactless cards and EMV chip and PIN roll out in the USA,  the security USP that apple pay offers will lose its uniqueness.

The USA needs secure card payments asap. Apple has a limited window to establish itself, It needs to overcome these teething troubles fast if it is to succeed

Brett King

Brett King CEO & Founder at Moven

There is much more for Apple to gain out of this long-term, than what they could lose by opting out with some teething problems. The reality is NFC POS infrastructure was always going to be a horse cart issue, but the very fact that people are asking to use ApplePay will in itself drive merchants to adopt NFC. Without the pressure at the POS, conversion would be slower. 

So you say Apple Users running into problems - I say Merchants gaining an awareness they have a bigger problem. 

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

According to another survey conducted by PYMTS.com/InfoScout (http://thefinanser.co.uk/fsclub/2015/03/does-anyone-really-need-a-mobile-wallet.html), the #1 reason why people who had used Apple Pay once but didn't repeat it was "they just forgot it was an option"! 

To me this reinforces the key challenge faced by Apple Pay and all non-plastic form factors of payments: Lack of compelling reason to use them. What’s interesting in this finding is, even after they received a compelling reason to try it once, consumers didn't find a strong enough motivation to adopt it on an ongoing basis. That’s a huge consumer behavior challenge. Maybe it'll resolve itself over time or maybe it won't. Who knows!

A Finextra member 

If the banks have to issue NFC cards and absorb those costs, and merchants have to upgrade their hardware whilst constantly complaining  about paying Interchange fees, why would the industry want to (additionally and long term) pay Apple Pay 15Bps for introducing an additional layer of complexity, especially if its not poplular and universally available? 

Brett King

Brett King CEO & Founder at Moven

Why would Apple Pay want to pay 15Bps? For the same reason they pay Mastercard and Visa 125Bps, namely they didn't build the infrastructure themselves, they don't have the hardware, and they would build a solution as competently as Apple regardless.

The banks had the opportunity to do this and didn't - so this is the cost of complacency. 

Ian Simmonds

Ian Simmonds Senior Sales Executive at FIS

As iPhones with Touch ID become more mainstream (here we can assume the 6S will come in Fall, 7 a year later etc) it is clear that adoption rates will boom at least in terms of people trying it out. By that time we should see more NFC terminals available so I expect Apple Pay numbers to grow dramatically.

The first comment above mentioned Chip+PIN - however as discussed in other articles here, the US is headed to Chip+signature. So the convenience and speed of Apple Pay (and other competing services) is going to win out, at least for the tech savvy.

David Gerbino

David Gerbino FinTech and Data-Driven Marketing Consultant at @dmgerbino

The problems reported by Phoenix Marketing International (PMI) are a good sign. People want to use this technology. It is what drives me to use my Google Wallet. A wallet puchase is easier for me. Many in the US say that there is no value vs the swipe. While true in a sense, that modalaty is now deprecated. When US customers start using EMV cards and can no longer simply swipe and have to dip, they will see the value of an NFC smartphone wallet like Apple Pay, Google Wallet, or the expected to be forthcoming new Android mobile payment systems powered by HCE/Android Pay. REmember, we need to look at this payment behavior looking forward, not backwards. 

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