Apple Pay, as Tim Cook told us during Apples earning call on Tuesday, is already posting some pretty impressive usage numbers. Apple Pay makes up more than $2 out of $3 spent on purchases using contactless payment across the three major U.S. card networks. Apples mobile payment system, which enables both in-app and contactless point of sale payments, has only been around a few months.
Forrester projected a $3.7 billion mobile in-person market for 2014, which means people using their phone to pay in-store. That could include contactless and the retailer scanning in a code from the phone, possibly for a loyalty transaction. The sector is projected to grow, according to Forrester, to $6.8 billion in 2015. These numbers do not include services like Uber, which let you pay via a mobile app. As far as Mulpuru is concerned, this discussion is about NFC-based payments, where the mobile phone is tapped on waved over a contactless point-of-sale system.
There’s also the question of how many people own NFC enabled phones. According to Pew Research, more than half of all Americans owned smartphones as of 2013. iDate put global NFC-enabled phone penetration at 278 million in 2014 and projected half a billion in 2015.
Apple sold 74.5 million iPhones last quarter, a large number of which are surely iPhone 6 and 6 Pluses. It’s not necessarily “a small base,” but still only a fraction of the current global smartphone user base which is closing in on 2 billion.
Panera Bread, which was asked by Apple to share Apple Pay usage stats with them, wasn’t prepared to share specific contactless pay numbers with me. The company’s Executive Vice President, Chief Transformation and Growth Officer Blaine Hurst did tell me in an email, though, “We can say it is a relatively small, but growing percentage of POS transactions and a larger percentage of Panera iOS Application orders.”
“Google Wallet launched payments and NFC so early. It was ahead of its time and the market was struggling with chicken and egg. No one had the chip in phone, Apple didn’t seem like it was going to integrate NFC… It wasn’t a big success because there wasn’t mass adoption,” said Philbin.
“Every thunderstorm starts with a little bit of rain, and as Tim Cook said, this is only ‘the first inning.’ If Starbucks is driving 16 percent of all its North American transactions via mobile, that speaks for itself. Marketers better pay attention and move quickly. We are in an age where things are changing extremely fast, and if you are not out in front, you are going to fall behind.” Read more…