Merchant Innovation

Dunkin’ Warms Up To Apple Pay

America can soon run on Dunkin’ and pay for it with a tap.

Following closely on the heels of Starbucks’ recent announcement that it will soon accept Apple Pay, Dunkin’ Donuts is the latest retailer to announce that it will accept Apple Pay. Customers can gift or reload virtual Dunkin’ Donuts cards through the Dunkin’ mobile app, which adds a layer of security by tokenizing transactions.

“Apple Pay represents an important step in our ongoing commitment to leverage the best technologies to help busy, on-the-go people enjoy our full menu of coffees, donuts and sandwiches any time of day, more quickly and conveniently than ever,” said Scott Hudler, Vice President, Global Consumer Engagement at Dunkin’ Brands. “With Apple Pay, we continue to differentiate our brand with a superior guest experience that includes offering a full array of options to reload your card within the Dunkin’ Mobile App.”

The latest addition adds fire to Dunkin’s ongoing battle with Starbucks in the mobile payment space. Starbucks’ 7,500 locations aim to start accepting Apple Pay next year, but the coffee juggernaut won’t have offer rewards on Apple Pay. 

But for now, the hype hasn’t translated to actual adoption.

As MPD CEO Karen Webster posited in her recent commentary: “Not since, well, ever has there been such fanfare around the launch of a new payments scheme. Apple’s Tim Cook proclaimed 2015 the ‘Year of Apple Pay‘ when it launched in the Fall of 2014. And ever since, the industry pundits and the media basically have called it “game over” for everyone else.”

“Yet a year later, the vast, vast, vast, vast majority of the early adopters of the new iPhones, and now the mainstream Apple iPhone 6/6S users, haven’t taken the bait. And the shine has come off the apple, so to speak,” Webster wrote.

Holiday shopping is an ideal time to gauge traction for new payment methods — and Apple Pay in particular didn’t fare exceptionally well. Research firm InfoScout examined the receipts of 300,000 Black Friday shoppers and found Apple Pay usage to be underwhelming, with only 2.7 percent of Apple Pay eligible consumers using Apple Pay to complete transactions.

This is corroborated in PYMNTS Apple Pay Adoption Tracker which measured Apple Pay adoption to be at 16 percent as of October. Moreover, those who didn’t use Apple Pay in a transaction where they could have (and who had used it in the past) had two primary reasons for not tapping with Apple Pay. As we have seen in past surveys, they either forgot (30.1 percent) or didn’t know that the store they were in offered it (30.1 percent).

This has been a persistent problem for Apple Pay since its inception over a year ago in October 2014.

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