Page 81 - Pay Magazine s2014

volume 8 • fall 2015
apple pay satisfaction
While adoption and frequency levels for Apple Pay are low, those that have tried it have been generally satisfied with their experience. Among those that have used Apple Pay, more than half indicated that they are “very satisfied” with their experience and 87 percent are at least “somewhat satisfied.” Perhaps most importantly—no consumers indicated any level of dissatisfaction. In noting this, however, it’s important to realize that early adopters of Apple Pay may be more likely to view the product favorably as they may already be consumers of other Apple products and have a positive relationship with the company.
53%
Very Satisfied
34%
Somewhat Satisfied
13%
Neutral
0%
Somewhat Dissatisfied or Very Dissatisfied
This satisfaction may very well translate into preference: 21 percent of Apple Pay users indicate that mobile payments are their preferred payment method compared with just 4 percent of the general population.
Implications & Conclusion
Apple Pay has had a moderately successful launch, with modest consumer usage but positive cus- tomer experiences to date. The latter represents an important first step toward longer-term adoption. While early adoption of Apple Pay may not be as high as many expected, we be- lieve issuers, including prepaid issuers, will need to continue to support mobile payment systems, such as Apple Pay, for the following reasons:
• Widespread adoption of smart- phones: According to the recent Federal Reserve study “Consumers and Mobile Financial Services” (March 2015), 87 percent of U.S. households have a mobile phone, and 71 percent of mobile phones are smartphones.
• Rapid growth of mobile payments: Some 40 percent of consumers have made a mobile payment in the last year, while ~20 percent indicate they would be willing to use their mobile phones for all purchases.
o Among consumers who have made a mobile payment in the past 12 months, mobile and in-store purchases represented the most common mobile pay- ment types after bill payment.
o We expect the upcoming launches of other mobile pay- ments solutions (e.g., Android Pay, Samsung Pay, CurrentC)
will further expand the merchant acceptance base and broaden the availability and visibility of mobile payments in general.
source: First Annapolis, 2015
apple pay transactions
Despite relatively few NFC- enabled terminals in the market to support Apple Pay transac- tions, the physical POS remains the primary origination channel for Apple Pay purchases. Among those that have used Apple Pay, 90 percent report having made a purchase in-store, while only 40 percent report having made an in-app purchase.
(N=86)
POS & In-App 31.40%
In-App Only
10.46%
POS Only 58.14%
source: First Annapolis, 2015
Apple Pay users tend to be younger, more affluent men:
46 percent of users were under the age of 35, 70 percent were male, and 33 percent reported annual household incomes above $100,000. Geographically, Apple Pay users were evenly distributed between the West, Northeast and South, with considerably fewer users in the Midwest. These demographics are consistent with the profile
of consumers who wished they could pay for everything with their mobile phones (“Con- sumer Payments Primary Research Examines Behaviors
& Perceptions,” First Annapolis Navigator, April 2015).
Hugh Gallagher is a principal, focusing on mobile/alternative payments, innovation and payments strategy at First Annapolis Consulting. Hugh has more than 25 years of experience in payments and financial services. He can be reached at Hugh.Gallagher@firstannapolis.com.
paybefore.com 79