For Apple Pay, A Tale Of Two Data Sets

Looking at data can be a bit like watching the famous Japanese samurai film “Rashomon.”

Different interpretations, different stories abound.

And when it comes to Apple Pay, if you want to look at a set of numbers one way, a rousing success emerges five years after launch.

But dig a bit deeper, elsewhere — in other words, right here — and success seems a bit … muted, as do future prospects.

Reports came last week that, per eMarketer, Apple Pay has taken the lead ahead of Starbucks in in the race for mobile payments. eMarketer said Apple Pay could log as many as 30.3 million users in the United States this year (those using Apple Pay at least once in the previous six months), outpacing Starbucks at 25.2 million users.

Those are the two front runners, with peers trailing, as Google Pay, according to eMarketer, will have a bit more than 12 million users and Samsung Pay a bit less than 11 million.

At first glance, the neck and neck (ish) jockeying of Apple Pay and Starbucks seems to back up a few interpretations — namely, that Apple has gained traction, finally, in the wake of the hardware that enables NFC payments at the point of sale.

Get the launching pad in place, the thinking goes — and the rocket will take off.

All Apple needed, it seems, was the mere presence at merchants to spur individuals to embrace wider adoption.

We at PYMNTS have a different take, as noted last week by Karen Webster, even before the eMarketer data came out. Though some data points in our own study of Apple Pay adoption a half decade after launch seem to dovetail with eMarketer’s, other details diverge and paint wildly different pictures.

To drill down a bit: The PYMNTS estimation of $46.4 billion transactions tied to Apple Pay is similar to the eMarketer data, which estimates $46.8 billion. The slight difference can be explained at least in part through time differences in the data collection periods.

While PYMNTS found that 5.2 million adults used Apple Pay for their last purchase, eMarketer said that 30.3 million used Apple Pay at least once in the last six months.

The remarkably similar $46 billion value tally seems to hint that though the eMarketer sample has used the mobile payment and digital wallet service more often (at least once over the last six months vs. the static, single use of the “last payment” queried by PYMNTS), the ticket sizes may be relatively small (thus the total transaction values shake out to a bit more than $46 billion as described.

That reading comes against a backdrop where, as PYMNTS found what growth Apple Pay has seen comes in tandem with growth in the percentage of people who have devices that work with Apple Pay, and a boost in the percentage of merchants that accept Apple Pay.

Smartphones Abound

As we wrote last week, 81 percent of adults have a smartphone. Of that tally, 47 percent have iPhones. As many as 90 percent of those iPhones are Apple Pay compatible.

Extrapolating that across the smartphone wielding population, 34 percent of the those over the age of 18 could conceivably pay with Apple Pay.

But they don’t.

In what is clearly a case of “build it and they might come — but the wait may be long,” a bit more than half of merchants accept Apple Pay, according to PYMNTS. It’s a finite pool, too. You can only roughly double that 51 percent to get to full penetration.

And yet: Increased availability is not leading to increased usage, at least as a percentage of transactions that could be made.

The PYMNTS research show that only 6 percent of adults with eligible phones use Apple Pay. That percentage has remained fairly stagnant even though the potential transactions — recorded as sales at merchants where Apple Pay is accepted — has soared from $88.2 billion in 2015 to $768.1 billion in 2019.

As Karen Webster wrote in this space just last week, platforms take off when they solve a pain point — and the mobile phone wielded in the general retail setting has yet to ignite. That’s because using cards really is not that onerous, reflected in the stagnant percentage of users who could use Apple Pay and who do so.

Trumpeting that Apple Pay’s user base trumps the Starbucks app’s user base by about 5 million users may be a case of mixing apples and oranges, or in this case, Apple and lattes.

Starbucks after all, offers its mobile payment solution as a way to pay and go and streamline the entire buying experience, from order to pickup. And of course, there’s a limited physical base in which Starbuck’s mobile payments can take place, where there are tens of thousands of stores across the globe, versus millions of acceptance points for Starbucks.

Finally, it should be noted that 4.6 million users in the U.S. used the Starbucks app at least one time in the past month, indicating a stickiness that other mobile payments platforms — and Apple, to be sure — wish they had.