Since the launch of Apple Pay, Apple’s new mobile payments offering, other mobile payment solutions in the US, like Google Wallet and Softcard, have noted that Apple has helped create general awareness of mobile payments, including for their services.
Apple only released its mobile payment system in October, but the feature is already gaining traction at many retail outlets, according to New York Times. For years, tech companies have dreamed of a future in which people ditch their wallets and pay for things with their smartphones. Apple is close to finally making this a reality.
Whole Foods, the high-end grocery chain, said it had processed more than 150,000 Apple Pay transactions. McDonald’s, which accepts Apple Pay at its 14,000 restaurants in the United States, said Apple Pay accounted for 50 percent of its tap-to-pay transactions. And Walgreens, the nationwide chain of drugstores, said its mobile wallet payments had doubled since Apple Pay came out.
“Apple Pay has been a huge tailwind,” said Michael Abbott, chief executive of Softcard, a mobile wallet backed by AT&T, T-Mobile and Verizon.
Abbott said that because of Apple, many companies now want to support the same technology for paying by phone: near-field communication (NFC), which enables devices to exchange information wirelessly over very short distances. This consistency would help make paying for things with a smartphone less confusing for shoppers.
Since Apple Pay was released, the Softcard app has been downloaded more often by new customers and used more frequently by its existing members, according to Abbott.
Last week, Google said its mobile payment product, Google Wallet, had also been used more after Apple Pay’s release.
“It’s a rising tide that has lifted all boats,” Abbott said.
However, not all retailers are blown away just yet by early adoption of Apple Pay. Toys “R” Us, which supports Apple Pay in all of its 870 stores, said that although the number of mobile payments at its stores increased after the introduction of Apple Pay, there were still relatively few mobile payments because customers were still learning about the new technology.
Mobile payments have quickly been growing more popular, but overall, spending with a smartphone is low. The research firm Gartner estimated that worldwide, people spent $235.4 billion through mobile payments in 2013, compared with $163.1 billion in 2012. That number is much smaller in North America, where consumers spent about $37 billion through mobile transactions in 2013, up from $24 billion the previous year.
Jan Dawson, a telecom analyst for Jackdaw Research, said that the hurdle for Apple Pay was that only the latest Apple phones, the iPhone 6 and iPhone 6 plus, support it. Also, there are still many American merchants who do not support mobile payments. So it will probably take several years before Apple Pay becomes mainstream, he said.
“Apple Pay is going to be a slow-burn success,” Dawson said. “Until then, it will be something of a novelty and something that most consumers use occasionally if they use it at all. That’s still enormous progress.
