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Apple Pay shows future promise based on November stats

Apple Pay customers used the service roughly 1.4 times per week and used Apple Pay at the same merchant for future transactions roughly 66 percent of the time.

Published

Dec. 19, 2014

Apple Pay has the ability to significantly transform the mobile payments space based on initial payment volume numbers that show the system was responsible for 1 percent of digital payment dollars in November, concludes a report from ITG Investment.

Key findings from the report show: 

  • 60 percent of new Apple Pay customers used Apple Pay on multiple days through November, suggesting strong customer engagement. In comparison, new PayPal customers used the service on multiple days during the same time period just 20 percent of the time.
  • Apple Pay customers used the service roughly 1.4 times per week and used Apple Pay at the same merchant for future transactions roughly 66 percent of the time.
  • Upon adoption of Apple Pay, the average consumer uses the service for approximately 5.3 percent of all future card transactions and 2.3 percent of all future card dollars spent.

ITG contends this a strong showing for Apple Pay considering that the service is only available to Apple customers with the newest hardware and it is currently supported by a relatively limited list of merchants. In comparison, Google Wallet, which launched in 2011, accounted for only 4 percent of digital payment dollars in the same month.

Apple Pay could pose a major threat to market leader PayPal's current dominance of the Mobile Payment space, according to Steve Weinstein, senior Internet analyst at ITG Investment Research. Citing PayPal's significant infrastructure barriers (a challenging relationship with payment counterparties and the lack of biometric capability) in comparison to Apple Pay's compelling mobile payment solution, Weinstein believes that it will be difficult for PayPal to match the ease of use and consumer appeal of the Apple solution.

In related news, Huntington Bank has agreed to become an Apple Pay partner and will offer customers the service in early 2015. 

"Apple Pay is another in a series of initiatives Huntington has undertaken to make banking easier, along with rolling out mobile deposit and Quick Balance, which allows customers to use their phones or tablets to find their balances fast," said Mark Sheehan, executive vice president and payments and channels director at Huntington. "Huntington is excited about what the future holds and looks forward to bringing this technology to our customers."