CUPERTINO, Calif.–Apple Pay, which many credit unions rushed to embrace after it was introduced in 2014 as they sought to get their cards top of wallet, has been rapidly gaining momentum, according to new data. It’s an ongoing development that deserves CU leaders’ attention.
The percentage of iPhones with Apple Pay activated was 10% in 2016 and 20% in 2017, according to research from Loup Ventures cited by the Wall Street Journal, “as most people seemed perfectly happy with their plastic cards and leather wallets.”
The data show adoption nearly doubled again in 2018, hit 50% by 2020, and is now around 75% and “inching closer to ubiquity. Of course, not every account that gets activated remains in active use,” pointed out Ben Cohen, writing in the Wall Street Journal.
After the initial slow rollout, what has changed?
“We did,” wrote Cohen. “Apple’s executives remained confident about the future even when the present wasn’t so rosy because they could look at the rest of the world’s acceptance of contactless payments and see that the U.S. was lagging years behind.”
Getting Comfortable
Cohen noted it has taken a while in the U.S. for the technological infrastructure needed for iPhone users to start using Apple Pay to roll out, as well as time for people to get comfortable with the change.
It would also take waiting for the public to get comfortable with change.
“’The company’s data suggested that customers were pleased with Apple Pay once they tried it. “People love Apple Pay,’ Loup Ventures analyst Gene Munster said in a recent interview,” observed Cohen.
The company says that 90% of retailers across the U.S. now take Apple Pay. The number that accepted contactless payments when the service was introduced was 3%, according to the Journal.
The ‘Classic Trajectory’
The Journal further noted the activation rate of Apple Pay has begun to resemble the classic trajectory of tech adoption, which “suggests that what is now a tiny slice of Apple’s pie can get much bigger, along with the overall market for contactless payments.”
Visa, meanwhile, recently reported tap-to-pay spending accounts for nearly 20% of its face-to-face transactions in the U.S., but the rates in big cities have climbed above 25%, with the Bay Area at 30% and New York reaching 45%. Apple Pay is also the top payment app for teenagers, according to investment firm Piper Sandler.
“As teens and cities go, so goes the nation,” the Journal stated.
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