Over the next 5-10 years, we believe augmented reality will emerge as the next dominant computing paradigm and that Google and Apple will provide the operating systems that power AR computing. The OS will need to incorporate core technologies including artificial intelligence, maps with points of interest, organized informational data, social data, a developer community, content, and payments. In what follows, we focus specifically on the payments element and report on the state of the union of Apple Pay.
Apple Pay State Of The Union:
- 2,091 banks accept Apple Pay globally, up from 1,439 in July of 2016.
- We estimate about 13% of active iPhones have activated Apple Pay.
- We estimate 30% of new iPhones are activating Apple Pay.
- 53% of retailers listed as “coming soon in browsers” have launched in the first 6 months.
- 31% of retailers in the Internet Retailer 100 accept Apple Pay, up from 28% in Oct.
- 44% of retailers in the Internet Retailer 100 have adopted Apple Pay at point of sale.
- 40% of retailers in the Internet Retailer 100 have adopted Apple Pay in-app.
- 13% of retailers in the Internet Retailer 100 have adopted Apple Pay in mobile browsers.
- 9% of retailers in the Internet Retailer 100 have adopted Apple Pay in desktop browsers.
- 22% of all possible points adoption leverage Apple Pay within the Internet Retailer 100.
Apple Pay adoption trend since Oct, 2016. In March 2017, we counted 31 of the Internet Retail 100 accepted Apple Pay in some form. In October 2016, while at Piper Jaffray, we counted 28 of the Internet Retail 100 accepted Apple Pay in some form, including point of sale, mobile and desktop (excluding in app).
A better way to measure Apple Pay adoption. We looked at the Internet Retailer top 100 online sites to gauge adoption of Apple Pay. Next, we created an Apple Pay adoption score that looks at current retailer adoption as a percentage of potential adoption. There are 4 ways a retailer can adopt Apple Pay, including point of sale, in app, mobile and desktop browsers. This equates to maximum of 316 Apple Pay adoption points within the Internet Retail 100, considering that only 62 offer point of sale and 54 offer an app. We found 22% Apple Pay adoption in March 2017, or 71 of 316 possible points of adoption. Since this is the first time we have measured the adoption score, we don’t have a comparative score.
Point of sale. Apple Pay has 44% adoption at point of sale within the Internet Retailer 100. 62 of the top 100 online retailers offer point of sale; among them, 27 accept Apple Pay in store. Apple Pay launched at retail and in-app in the fall of 2014. Apple added Apple Pay for mobile and desktop browsers in the fall of 2016. In other words, the company has had over 2 years to build adoption at point of sale. Apple Pay at point of sale works with a broader tap and pay network; most locations that accept Apple Pay also accept other tap and pay offerings including Google Wallet and Samsung Pay. Since this our first measurement, we don’t have a comparative number. Bottom line: adoption of Apple Pay at point of sale is growing nicely, in-line with growth among other digital payment players, including Google and Samsung wallet.