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Apple Pay Satisfaction Rockets to 98 Percent, But Adoption May Stall

Apple Pay users are fanatically satisfied — to the tune of 98% of in-store users and 93% of in-app users surveyed — making an average of 2.6 weekly in-store purchases and 2.3 weekly in-app purchases, according the Auriemma Consulting Group.

To a degree not seen in other payment mechanisms, Apple customers take the initiative and search for stores where the service can be used, overcoming the slow pace of deployment and marketing of mobile wallet acceptance.

"The people who are using Apple Pay aren't just satisfied. They are in love," said Marianne Berry, Managing Director of Auriemma’s Payment Insights practice. The data comes from a June survey of 500 consumers with access to Apple Pay, supplemented by qualitative phone interviews.

With any rapidly growing payments technology, there will eventually come a point of saturation, where the growth in adoption slows as almost everyone that wants to use the service is using it. The survey found some hints that such a saturation point for Apple Pay may be imminent.

Of the surveyed iOS users, 42% were using Apple Pay, 16% said that they were likely to use it and 41% said they had no plans to use it. Consumers are notoriously bad predictors of their future behavior, but the idea that 41% of Apple's most loyal smartphone users say they don't want to use Apple Pay is striking.

But she stressed that the willingness for Apple Pay users to go out on their own and hunt down participating stores may represent a stark contrast with Android users. "Nobody had to tell (Apple Pay users) how to find a store," since they instinctively go to Apple's website to find listings, Berry said. "I just don't think that Android people have that same instinctive response of 'Well, I'll just go to the Google Play Store.'"

Forty-two percent of iPhone 6 and iPhone 6 Plus owners said that they had successfully used Apple Pay (no other iPhone models support Near Field Communication payments), according to the survey. Of those who have used Apple Pay, 70% had used the service both in-store and in-app. First purchases are made in-store 69% of the time.

Another interesting detail was how people are using Apple Pay. As expected, most shoppers are using their default card for most purchases, but 69% have added an average of 2.4 cards to the mobile wallet (83% said their Apple Pay default card is the same as their iTunes default card.) One surprise: Apple officials have said that they expected most Apple Pay transactions to happen without opening an app, but the Auriemma report found that about two-thirds of users open Apple's Passbook app to activate Apple Pay at the point of sale.

"Users report spending a median of $40 on their first purchase and not surprisingly spending tends to increase with frequency of use," the report said. "Among heavy users, the median for largest purchase with Apple Pay is $150, much higher than the $28 reported by light users."

The report also noted a strong connection between where consumers purchased their iOS device and whether they ultimately used Apple Pay. The surveyed iOS users overwhelmingly bought their phones either at a mobile carrier store (49%) or an Apple retail store (40%), with the remaining 11% using e-commerce or another retailer (Best Buy, Walmart, Target, etc.) that sells the phone in its stores.

But even though the split between Apple retail store and mobile carrier store is fairly even, 67% of the the consumers who made the purchase at an Apple store used Apple Pay compared with 29% of those who purchased the phone at a carrier store.

"It may simply be that people who are more Apple-oriented go to the Apple store. And it may be that at the Apple store, they do such a good job of selling (the concept of) Apple Pay that you go out and use it," Berry said. "Most of the carrier stores are not that invested in the success of Apple Pay."

Berry said that users also told her team that the process for editing payment cards within Apple Pay was difficult and they found it a lot easier to delete and re-provision a card. That is typically going to be an issue as cards hit their expiration dates or are replaced due to the U.S. migration to EMV-chip security.

Another finding is the key reason cited by users who chose not use Apple Pay. The top choice in June was "store personnel can't deal with it," an option chosen by 32% of those surveyed who said they wouldn't use Apple Pay again (The second top choice—with 24% selecting it—was "didn't think of it.") What is interesting about that answer is how sharply different it was from the same survey done by the same team in April. At that time, "store personnel can't deal with it" was one of the least-chosen answers, coming in at 7%.

Presumably, as Apple Pay—introduced in October 2014—gets more established, two things should happen. First, employees should become more familiar with the payment method. And secondly, shoppers who have already used the service a few times should need assistance less often. The report's findings go against these assumptions.

Berry said some of that difference could be explained by an inconsistency in experience from one store in a chain to another store in that same chain. "I went to one Walgreens and they were fine and I went to another Walgreens and they didn't know what I was talking about," she said.

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