Study Finds Contactless Cards Still Apple Pay’s Biggest Competition at Checkout

Apple Pay extended its commanding lead over the mobile wallet competition in the last 12 months, now capturing 48% of all in-store mobile wallet payments in the United States, with second place Google Pay far behind at 17%.

However, mobile wallets remain unpopular for in-store payments, accounting for just 5.8% in Q2 2022 — slightly less than in 2019. The biggest threat to Apple Pay in physical checkouts is not other mobile wallets, but contactless cards, which grabbed 14% of in-store payments — nearly twice the share we observed in 2021.

In “Mobile Wallet Adoption: Apple Pay @8: Still The Big Fish In A Small Mobile Wallets Pond,” PYMNTS surveyed approximately 2,300 U.S. consumers to learn how they pay for in-store purchases and determine where Apple Pay and other mobile wallets are heading.

Key findings from the report include:

• Debit and credit cards remain king when it comes to in-store payments.

As a whole, mobile wallets account for just 5.8% of in-store payments. This represents a strong rebound from the mid-pandemic low of 4.5% we recorded in 2021, but it is still below the pre-pandemic level of 6.1%. In Q2 2022, debit and credit cards dominated physical checkouts, accounting for 44% and 27%, respectively. Consumers still reached for cash 19% of the time.

• Contactless cards are winning the battle for touch-free checkouts.

Contactless cards accounted for 14% of in-store transactions in Q2 2022, nearly twice the share they captured in 2021. This increase shows that these payments are the clear leader in touch-free checkouts, far ahead of Apple Pay and other mobile wallets. Consumers identify similar reasons for using contactless cards and mobile wallets for in-store payments, primarily citing speed and convenience.

• Generation Z consumers are adopting mobile wallets faster than older age groups, but they still prefer cards.

Gen Z consumers used mobile wallets for 9.3% of their in-store checkouts in Q2 2022, up from 7.3% in 2021. Usage rates among millennials and bridge millennials also jumped substantially in the last 12 months. Nonetheless, consumers of all age groups strongly prefer debit cards, credit cards and cash.

These are among the many findings of this year’s PYMNTS Mobile Wallet Adoption Report, which reveals how Apple Pay has emerged as the leading mobile wallet and why contactless cards, rather than Google Pay and other direct competitors, represent Apple’s biggest competitor in physical checkouts.

To learn more about the outlook for Apple Pay and mobile wallet adoption, download the report.