Companies have been talking about replacing credit cards with smartphones. And that finally became a reality on October 20, 2014. All the biggest players hopped on board right away, along with 500 banks and 220,000 retail locations. So how’re things going now? Let’s take a look.
So far, Apple Pay is killing it. Early on in November 2014, it was already accounting for 1% of all digital payments, said an article at TechRadar. Google Wallet, which has been around since May 2011, accounts for 4% of digital payments.
On top of that, Apple’s loyal following is making significant use of the service. 60% of Apple’s users used the service more than once in a month. To put that in perspective, the same metric is just 20% at Paypal.
And feedback about the mobile wallet is generally positive, or even very positive. For example, this article notes 52.6% of those surveyed ApplePay users think it’s “amazing” and “easy-to-use.” Just 3.5% said it didn’t work for them, while 1.8% said it was difficult to use. That’s a pretty good satisfaction rate for a service not even 6 months old.
But there’s a long battle to wage yet! While ApplePay is certainly off to a good start, they have a long way to go. In terms of market share, Paypal controls 50% of the market, while Google Wallet contributes to 1/3 of Paypal’s share. Then there’s other competitors like Amazon Payments, V.me, ISIS, and LevelUp.
ApplePay Security Concerns
As much as people like ApplePay, it does have its fair share of security concerns too. One potential security concern involves cyber criminal’s ability to use CVVs for both online and physical in-store fraud. The process is relatively simple because Apple and the banks designed it that way for honest users. But at this point, that’s just a concern and speculation.
In another related situation, bank executives noted a case where cardholder information was stolen from retailers. However, ApplePay, which uses tokenization, did not have any of its information breached!
And another future concern is how the Apple Watch will affect mobile payments. That’s a complete unknown because no one knows if smartwatches will even catch on. For Apple Pay, so far, so good. However, we’ll see what happens in the future.