Apple Inc. Chief Executive Officer Tim Cook has called 2015 the “year of Apple Pay.” So far it’s been underwhelming.
The mobile-payments system, which marks its one-year anniversary this month, has failed to catch on with consumers, accounting for only 1 percent of all retail transactions in the U.S., according to researcher Aite Group. The service -- which allows users to pay for purchases by tapping their iPhone, iPad or Apple Watch on a device at cash registers -- has suffered from a lack of promotion and limited number of terminals available in stores. Plus Apple Pay is only available on newer iPhones.
“People don’t know why it is they’d use Apple Pay,” said Jared Schrieber, CEO of InfoScout, a shopper-research firm. “They are satisfied with the current methods and they don’t know how Apple Pay works.”
Apple, which relies on new products to sustain growth, entered a nascent market when it introduced its mobile-payments system last year. A similar feature had been available in Google Inc.’s smartphones through Wallet since 2011, yet adoption was anemic, according to Bloomberg Intelligence. Like most things Apple, expectations were high for the payment service, which was seen as a potential rival to PayPal. In January, Cook spoke of “momentum” for Apple Pay, which, he said, was “off to a very strong start” and being implemented by banks, credit unions and numerous merchants.
Competitors have followed -- Samsung Pay and Google’s Android Pay were both introduced this year -- but the consumer hasn’t yet. Merchants who adopted the system say that demand has been tepid.