Apple Pay got off to a hot start after its debut in October, attracting 11% of all credit card-using households and converting 66% of iPhone 6 users in its first four months on the market, according to an ongoing study of more than 3,000 credit card users conducted by market research firm Phoenix Marketing International.
Although iPhone users appeared eager to try out Apple's new mobile payment plan – the study estimates that more than 88% of those who set up an Apple Pay wallet went on to make a purchase with it either in a retail store or in a mobile app – they have run short on opportunities to use them in the time since.
"The demand is there: 59% of Apple Pay users have gone into a store and asked to make a purchase with Apple Pay," Greg Weed, Phoenix Marketing International director of research, said in a statement. "But so is the disappointment: 47% visited a store that was listed as an Apple Pay merchant only to find out that the specific store they visited did not accept (or were not ready to accept) Apple Pay."
Even the users who do find Apple Pay-compatible retail stores have had difficulty completing a transaction with the technology. Phoenix senior vice president Leon Majors said that two out of three Apple Pay users have run into terminals that either don't work or take too long to process the transaction, as well as retail cashiers and staff who don't know how to help them with the process.
As a result, 48% of those who have used Apple Pay have only done so for one transaction, according to the study.
Retailer support was always the biggest obstacle facing Apple Pay, if only because it was the only aspect that it couldn't control. The iPhone 6 line's massively successful debut meant that a whole lot of users received Apple Pay by default, and the excitement of trying out the new features on a new smartphone likely contributed to that active adoption in the early months.
But Apple learned just days after launching its mobile payment app that retailers weren't going to embrace it, when CVS and RiteAid stores disabled their near field communications (NFC) payment terminals after finding that they processed Apple Pay transactions. The boycott also extended to the dozens of other companies that make up the Merchant Customer Exchange (MCX) – including 7-11, Dunkin' Donuts, ExxonMobile, and Lowe's Home Improvement – which is developing its own mobile payment technology.
The MCX's objective with its mobile payment app – to develop a mobile payment service that generates revenue for the retailers, rather than lining Apple's pockets – underlines the issue with Apple Pay support in the market. Quite simply, retailers have no incentive to fix broken NFC terminals or train cashiers on how to support Apple Pay users in the store. If Apple Pay doesn't work, customers trying to use it will just use cash or a credit card terminal.
The Phoenix report still projects a strong future for Apple Pay, with 23% of users planning to significantly increase Apple Pay use in the next three months. But unless Apple finds some way to ensure that they actually can use it more frequently, they might not be able to.