Apple Pay

Apple Pay Starts Strong, Considering

Apple Pay could pose a significant threat to PayPal’s current dominance in digital payments, according to a report by investment company ITG, which says Apple Pay was responsible for 1 percent of digital payment dollars in November — but half of Apple Pay use was at just five retailers.

The ITG Mobile Payments report, using data from the firm’s own consumer panel, said Apple Pay customers used the service 1.4 times per week, and two-thirds returned to the same merchant for future transactions, Finextra reported

That’s a strong showing, ITG said, considering that Apple Pay is only available on iPhone 6 models and is currently supported by a limited number of merchants. In comparison, Google Wallet accounted for only 4 percent of digital payment dollars in November, three years after launching.

According to the report, 58 percent of all November Apple Pay transactions were at five merchants (Whole Foods, Walgreens, McDonalds, Panera Bread and Subway), which accounted for 45 percent of the total amount spent through Apple Pay. The average new Apple Pay customer used the service for about 5.3 percent of all card transactions and 2.3 percent of all card dollars spent, with 60 percent using it on multiple days in November. In comparison, just 20 percent of new PayPal customers used PayPal on multiple days in November.

PayPal’s significant infrastructure barriers — no biometric capabilities and a challenging relationship with payment counterparties — mean it will be difficult for PayPal to match the ease of use and consumer appeal of Apple Pay, said Steve Weinstein, senior Internet analyst at ITG Investment Research.

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