3 Stores Where Apple Pay Is Already Making an Impact
Although it has been less than a month since Apple Pay was first activated, the new mobile payments system from Apple has already been changing the way that people pay for products. While similar mobile payments solutions like Google Wallet, Softcard, and LoopPay have long been available, it appears that Apple Pay has already generated a higher level of consumer interest than those competing systems.
On the other hand, there is no question that Apple Pay made its debut at an opportune time. According to predictions made by market research firm Gartner, the worldwide mobile payments industry is set to enter a phase of rapid growth over the next several years, with an average annual growth rate of 35%. By 2017, the worldwide mobile payments market is expected to be worth $721 billion and have more than 450 million users.
However, although Apple Pay may be deriving some benefit from the growth in the overall mobile payments industry, it also appears that Apple Pay is being adopted by users at a much faster rate than any other previous payments solutions. Some industry watchers believe that Apple Pay may even be driving the growth of the overall mobile payments industry.
According to The New York Times, the use of Google Wallet has actually increased since Apple Pay made its debut. Softcard (formerly Isis), a mobile payments system backed by AT&T, T-Mobile, and Verizon, has seen a similar bump from Apple Pay. According to Softcard CEO Mike Abbott, the Softcard mobile app has been downloaded and used more often since Apple Pay was released. “It’s a rising tide that has lifted all boats,” Abbott told The New York Times.
The impact that Apple Pay is having on the way people pay for products and services is becoming even more apparent now that many retailers and merchants have released information about how many of their customers opted to use Apple’s fledgling mobile payments system during the first several weeks of its availability. Here are three retailers and merchants where Apple Pay has already made significant inroads.
1. Whole Foods
Earlier this month, a former Google and PayPal employee calculated how much of an impact Apple Pay has had at organic food supermarket chain Whole Foods. According to a tweet from Mike Dundas, 150,000 Apple Pay transactions were conducted at Whole Foods stores during a 17-day period after the mobile payments system launched. Per Dundas, this equals approximately 1% of Whole Foods’ total transactions during that time period. While this is just an estimate, it should be noted that Dundas has plenty of experience with analyzing mobile payments. According to his LinkedIn profile, Dundas helped build “Google’s commerce & payments business across online, offline and mobile channels” and introduced Google Wallet.
Whole Foods’ success with Apple Pay may have also inspired other grocery store chains to jump on the Apple Pay bandwagon. MacRumors reports that Winn-Dixie and Bi-Lo both recently started accepting Apple Pay. This means that Apple Pay can now be used at five major grocery store chains: the three above-mentioned partners, Meijer, and Wegmans.
The largest hamburger fast food chain restaurant in the world was one of the earliest supporters of Apple Pay, and its endorsement appears to be paying off. McDonald’s, which accepts multiple contactless payment methods at its 14,000 U.S. restaurants, recently told The New York Times that Apple Pay now accounted for 50% of all its “tap-to-pay” transactions. Fast food chain Subway also accepts Apple Pay, but the company has not yet revealed how many customers have used the system. It also remains to be seen if McDonald’s success will inspire fast food holdouts like Pizza Hut, KFC, and Chipotle to start accepting Apple Pay. According to representatives contacted by The Daily Dot, those three restaurants currently do not accept Apple Pay.
Earlier this month, CVS and Rite Aid sparked a controversy with Apple users when they abruptly shut down all Near Field Communications (NFC) readers at their stores soon after Apple Pay made its debut. The decision appeared to be related to the two drugstores’ membership in the Merchant Customer Exchange (MCX), a merchant-owned mobile commerce network that is developing its own mobile payments solution known as CurrentC.
In contrast to its drugstore competitors, Walgreens was on board as an Apple Pay partner when the mobile payments system was first announced at Apple’s September media event. Now it appears that Walgreens’ early support for Apple Pay is giving the company a competitive edge with new iPhone owners. According to The New York Times, Walgreens reported that mobile payments at its stores have doubled since Apple Pay was rolled out.
Although Gartner expects the worldwide mobile payments industry to be worth $721 billion by 2017, North America is one of the slowest-growing regions when it comes to the adoption of mobile payments technology. Worldwide mobile payments transactions reached $235.4 billion in 2013, but North America only accounted for a $37 billion share of that amount. However, judging by the rate at which Apple Pay is already being used at these three merchants, it may not be long before North America’s share of the worldwide mobile payments market exceeds analysts’ expectations.
Follow Nathanael on Twitter @ArnoldEtan_WSCS