An Inconvenient Apple Pay Truth

Last week’s Wall Street Journal piece on stalled Apple Pay uptake in the US market is still playing out in the press. Karen Webster’s take on her PYMENTS.COM site is that Apple Pay was all hype. There is a lot of hype, and click bait, in Webster’s piece too. There’s also an all-you-need-to-know bit at the end: statistics were originally presented on March 15th at Innovation Project 2017 by Karen Webster, CEO at

The core bit is her analysis of US payments market data, with a lot of guess-work, and a sexy conclusion that sells the piece:

Here are a few assumptions that we’ve made:

  • We know that stores Apple reports as accepting Apple Pay have $420 billion in annual sales. We come to that number by acknowledging that $392 billion is derived from the stores who are part of the Top 100 retailers — the rest is an assumption based on remaining spend at other smaller merchants.
  • We assume that people using the Apple Pay app in those stores spend, on average, what other consumers spend.
  • Using that $420 billion, we start doing the math:
  1. 1 percent of people have iPhones, and 74.1 percent of those have iPhones that work with Apple Pay, which means that 32.7 percent of people have the right kind of iPhone with the right handsets. Multiply that by $420 billion in sales and that equals $137B of potential sales by Apple Pay users.
  2. We know from our data that Apple Pay is used in 4.03 percent of all eligible transactions. That means that Apple Pay is driving $5.5 billion in transaction volume, exclusive of motor vehicles and gas stations. That’s about .10 percent share of retail spend.

We can push the assumptions around here and there, but no matter how you cut the data, using any number of assumptions — and based on a data set that reflects 2.5 years of consistently surveyed consumers about their Apple Pay usage — Apple Pay’s share of retail spend appears to be really small.

Skip to the wrap up:

The inconvenient Apple Pay truth is that if Apple is really playing the long game, they might have to be willing to pay for it. And, while they’re at it, give merchants some incentive to push it.

Let the next three years of Apple Pay payments begin — without the hype this time.

Hype aside, Tim Cook has admitted that Apple Pay growth in the US “has hit an air pocket,” but for all the negativity in the press right now I agree with Horace Dediu’s take: this is a long, complex and messy transition without easy wins, or sexy press headlines.