Apple Inc. CEO Tim Cook said that 2015 will be the year of Apple Pay, but it has been underwhelming so far. The mobile-payments system, which will mark its first anniversary this month, has been unsuccessful at catching on with consumers, says a report from Bloomberg.
Reasons for its failure
Apple Pay accounted for just 1% of all retail transactions in the U.S, says a report from research house Aite Group. The service allows users make easy payments by just tapping their iPhone, iPad or Apple Watch at cash points. Despite being easy to use, it remained unsuccessful due to lack of promotion and limited number of terminals available in the stores. The fact that Apple Pay is available only on newer iPhones is also a major reason for its slow adoption.
“People don’t know why it is they’d use Apple Pay. They are satisfied with the current methods and they don’t know how Apple Pay works,” Jared Schrieber, CEO of InfoScout, a shopper-research firm told Bloomberg. Google’s phones have a similar feature since 2011, called Wallet, whose adoption has also been anemic, the report says.
Apple Inc. has high hopes with this payment service, which is seen as a potential rival to PayPal. Speaking of ‘momentum’ for Apple Pay, Cook said earlier this year that it was “off to a very strong start” and many banks, credit unions and merchants implemented it.
Tough road ahead for Apple Pay
Apple Pay has two rivals –Android Pay and Samsung Pay- both launched this year. All three are competing to grab a larger share of the nascent market. With the launch of Samsung Pay in the U.S., the Korean firm already has a head start. The service supports both contact-less payments and magnetic strips, and therefore, can be used at a larger number of merchant and trading locations than those of rivals. Samsung’s payment service supports Samsung’s Galaxy S6 Edge, Galaxy S6 and Galaxy Note 5.
Samsung makes use of MFT technology along with NFC. The MFT technology emits a particular magnetic code to make sure the magnetic swipe credit facilities work equally well. LoopPay, the pioneer of this technology, was acquired by Samsung back in February to help it stay ahead of the rivals with its usage.
On Friday, Apple Inc. stock closed up 0.73% at $110.38. Year to date, the stock is down almost 2% while in the last one-year, they are up almost 11%.