Download Apple Pay: The First Year Extracts from: Greg Weed

Extracts from:
Apple Pay:
The First Year
Greg Weed
Director, Card Performance Research
828-697-9192
[email protected]
Apple Pay Tracking – The First Year
2014
2015
October 20,
2014
Credit Card
Monitor
•
•
•
•
•
n=19,000
January 2013October 2014
October
2015
n=3,000
February
> 4 Months
n=3,000
July
> 8 Months
n=3,000
September
> 11 Months
HHs owning a GP credit or charge card for personal use
Financial decision makers for the households (18+)
Sample balanced to Census (CPS 2015) using ‘household’ not ‘population’ benchmarks
Cardholders provide responses for specific card brands
Consistent methodology over time
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2
Market Growth
1. Apple Pay quickly reached 11% of credit card households in the first four
months – but the adoption growth rate has slowed considerably.
Total
Cardholders
11%
13%
14%
2. Consumer segments display different adoption profiles. A surge in Gen X
adoption was observed even as the market began to flatten.
3. Pre-launch demand was captured quickly as the first tier of adopters entered
the market – largely replacing previous use of contactless plastic cards.
4. Some have intuitively grasped the inherent convenience and safety benefits of
Apple Pay while second tier prospects are still happy with plastic cards.
5. Apple Pay usage – both in-store and in-app – closely follows adoption.
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3
Friction and Support
6. As the market has grown, friction has remained unabated -- resulting in lost
Apple Pay transaction opportunities.
11%
13%
14%
Friction
7. Friction, however, has not alienated Apple Pay users as they look forward to
using Apple Pay more often, adding more cards to the wallet and leaving their
plastic payment cards at home.
8. ‘High-tech’ mobile wallets require ‘high-touch’ marketing. Inbound inquiries
from Millennials and Gen X’ers create engagement, customer control and
brand differentiation opportunities.
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4
Market at a Glance – Penetration Rates
Apple Pay adoption reached an early-on threshold of 11% after the first four
months followed by incremental gains as Year 1 closes out.
Base: All HHs Owning a GP Credit or Charge Card
72%
73%
44%
38%
75%
41%
Credit Card
16%
21%
19%
Own a Smartphone
Purchased a New Smartphone in Past 5 Months
Yes 6 Model
Own an iPhone
Adopted Apple Pay – Linked any Payment Card
11%
February
n=3,000
13%
July
n=3,000
14%
September
n=3,000
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5
% CC HHs Using Apple Pay for Purchases
Apple Pay usage rates vary widely by segment.
Highest Rates
Q2 Growth
Millennials
(18-32)
24%
Recent Growth
February
24%
July
Generation X
(33-48)
Credit Card
15%
17%
26%
All Credit Cardholders
(Including Non-SP
Owners)
Note: Users ≈ 90%
of Adopters
September
23%
9%
11%
15%
Largest Group
July
19%
19%
Mass Market
13%
9%
February
Affluent
11%
12%
September
2015
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6
Transaction Opportunities Lost
Terminal and training issues reported throughout the first year.
Type of Problem Encountered
(Aggregate Figures YTD 2015 With Q3 Figures Equivalent to Q1 Figures)
Merchant terminal took too long to record the
transaction
44%
The cashier or sales agent was unfamiliar with
Apple Pay and was not able to help
43%
Transactions were posted incorrectly or were
double counted
29%
32%
The Apple Pay terminal didn't work
It was inconvenient to select a specific card in
Passbook at check-out
Just took me awhile to get used to everything
25%
15%
Base:
Apple Pay Users Experiencing Any
Problem at Checkout
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7
Consumers Will Face a New World of Choices
“I like technology that makes my life easier, not more
complicated.”
“I’m concerned that you need more and more
different payment methods.”
“I would consider CurrentC if my information was not shared
with retailers. I would use Apple Pay if I had an iPhone but I
like my Android.”
“Am interested in Apple Pay but have an Android phone.
Must I purchase an iPhone to use Apple Pay?”
“It should be known that your phone is not the safest place
to keep unique information.”
“Apple Pay sounds better but have no problem using an
actual credit card … but I have no interest in switching to
iPhone just to able to use Apple Pay.”
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