Retailers Cite 'Insufficient Customer Demand' as Biggest Reason for Not Supporting Apple Pay

[MacRumors]

Despite Apple dubbing 2015 "the year of Apple Pay" in its January earnings call, a number of big-name retailers remain skeptical over the contactless payments service, according to Reuters. The service launched last October in the U.S. and has steadily gained support from numerous banks and retailers in the months since.

Working through the National Retail Federation's top 100 United States merchants, of which Apple said "about half" would begin to accept Apple Pay this year, Reuters found the company's predictions may be "too optimistic," with many retailers remaining skeptical about Apple Pay.

Since then, the company has aggressively courted retailers - and claimed significant success. "We've spoken to all of the top 100 merchants in the U.S., and about half will accept Apple Pay this year, with many more the following year," a company spokesperson recently told Reuters.

After questioning and interviewing a total of 98 of the top 100 NRF merchants, it was discovered that fewer than a quarter of the retailers currently accept Apple Pay while nearly two-thirds of the companies confirmed they would not be supporting the mobile payments service this year. Just four retailers confirmed to Reuters that they would in fact be joining the support of Apple Pay in 2015.

Apple has still made significant progress since the service's debut last October, increasing retail acceptance to over 700,000 points of sale as of the last financial Apple Pay update in March. According to one retailer not accepting Apple Pay, the Cupertino-based company comes on strong when pitching to possible partners.

Interviews with retailers suggest that the company has relied on aggressive marketing to recruit participants. "They have been pushing hard and it's been that way for months," said the representative of one large retailer that has no plans to accept Apple Pay. "They have called and tried to persuade us even after we communicated our decision to them." The company hasn't adopted Apple Pay, he said, because not even a "small percentage" of its customers have asked for it.

When searching for a reason why so many companies were against backing the service, "insufficient customer demand" was the biggest reason cited by merchants. This was followed by lack of data access granted through observing customer buying habits, cost of installation, and support of other contactless payments solutions like Current-C. Twenty-eight total retailers noted that lack of data access, and the inability to send customized advertisements to individual users like traditional credit cards allow, is a "key reason" they won't accept Apple Pay.

Despite questions about the future of Apple Pay, its current partners echo enthusiasm in customer satisfaction and ease-of-use with Apple Pay. Whole Foods spokesperson Michael Silverman told Reuters that Apple's mobile wallet accounted for 2 percent of its sales dollars as of March, with an expected increase in the future. "Our shoppers are really enjoying the speed, convenience and security of Apple Pay," Silverman said. With WWDC around the corner, and rumors of much-requested features such as a rewards program coming to the platform, its likely additional companies will come around to Apple Pay as Apple beefs up the still fairly nascent service and consumer traction continues to improve.

Update 11:19 AM: Apple has provided a statement to iMore standing by its predictions of Apple Pay adoption for this year with some additional context not shared in the Reuters report.

"Customers love Apple Pay and we are very happy with the progress of our rollout since launching just six months ago," an Apple spokesperson reiterated to iMore. "We've spoken to all of the top 100 merchants in the U.S. and about half will accept Apple Pay this year, with many more the following year. There's tremendous momentum from not only large retailers but also Main street merchants, with payment service providers telling us they're seeing unprecedented demand from small and medium businesses nationwide."

Article Link: Retailers Cite 'Insufficient Customer Demand' as Biggest Reason for Not Supporting Apple Pay

 

[sputnikv]

so many retailers have the hardware but elect to not have NFC or the pin reader enabled. i don't understand the logic

 

[cmChimera]

Ok, so from now on, I'll start telling retailers I want Apple Pay.

 

[happydude]

i think the hardest thing for me is not knowing where apple pay is accepted. there's no emblems or markings in stores, and it seems like you have to have a list of places memorized and then awkwardly ask the retail person if they accept it. only place i'm confident going in is the apple store itself. i like the technology and would like to use it more often, there's just no awareness in the real world or how/where to use it. the few times i've tried at places that have it, the people behind the counter are usually confused and don't know what's going on.

 

[ryansimmons323]

Well they won't get support if they don't support it! This, and bureaucracy are the two biggest barriers to tech!!

 

[thekeyring]

They'll get there. It won't be 2016 when we think of smartphones as a common a way to pay as cash or card, but we'll get there eventually.

If there was an incentive for merchants to encourage people to use it - for example, "If you use Apple Pay you can get 10% off your next purchase" - Awareness & usage would increase, I'm sure. Some shops here in the UK offer you money off if you sign up to their mailing list.

 

[kmj2318]

The masses don't really care that they get to use their phone instead of their card. It's all the same. It'll be a while before things really change.

 

[hexor]

"lack of data access granted to customer buying habits"

 

[seamer]

You don't wait for your paying customers to ask for easier ways to pay, you just make it easier by default. I hate people in roles where they just don't belong.

 

[phillipduran]

Apple pay is neat, but paying with cash or plastic isn't a pain point and is a very efficient process.

 

[blacktape242]

I use it whenever I can, I wish more places had it!

 

[randymac09]

I wonder how they are gauging customer interest. I would love to be able to use Apple Pay everywhere I shop, but I don't see the places that don't accept it asking if I'm interested in it. I do think it is something that will take time, but I also think that stating lack of demand is a poor reason not to support it.

 

[furam90]

There's no demand because retailers don't have the machines set up. Derp. Also there's no clear indication of who actually supports it. So instead of taking my phone out to pay, having it not work, and looking like a fool, I just take the time to swipe my card.

In places where I know it works, it really is very useful. Ex: Taxi's, vending machines, some convenience stores

 

[bushido]

used a credit card at a german grocery store for the first time today. felt awesome

 

[eiuro]

Any retailer that says customers haven't asked for Apple pay as a reason they don't support it are idiots! I would think you'd want to support all forms of payment that make sense.

 

[applesith]

I love using it and look on the POS terminal to see if the store accepts it.

 

[SimonTheSoundMa]

i think the hardest thing for me is not knowing where apple pay is accepted. there's no emblems or markings in stores, and it seems like you have to have a list of places memorized and then awkwardly ask the retail person if they accept it.

Anywhere that has the Contactless Payment logo on their POS or chip and pin machines. There is no such thing as being Apple Pay only, as long as it supports NFC contactless payment it will work.

 

[Crosscreek]

Very few retailers in my area don't bother training the check out people. It's going to take a few years for retailers onboard fully.

 

[Sasparilla]

This must be why CVS etc. turned off their wireless payment systems just as Apple Pay rolled out....

 

[Revearti]

I use it all the time. I think a lot of people don't know it exists because they still don't know how to use their phone at its current state. There is probably also a handful of people who are concerned about security and afraid to use it.

 

[KdParker]

Any retailer that says customers haven't asked for Apple pay as a reason they don't support it are idiots! I would think you'd want to support all forms of payment that make sense.

This is about the retailers waiting to get MCX up and running so they can cut out the middle man (credit cards) so they can mine data and also charge customers for payment transactions.

IMHO.

 

[69650]

It's so quick and easy to use chip & pin or contactless cards I can't see most people bothering with Apple Pay once the initial interest has died down. I wouldn't use my iPhone but I would use the Apple Watch if I could just hold it against a contactless terminal to make small payments. Easier than fumbling around for change.

 

[Jacombs]

BS, I send a weekly email to multiple retailers. They're just looking for an excuse. Guess I'll have to boycott to get attention.

 

[odditie]

Apple pay is neat, but paying with cash or plastic isn't a pain point and is a very efficient process.

I agree. Also with so many not supporting it, the security benefits are minimal.

I also find it awkward to do it. The merchant sometimes has to do something prior to you using it which means rather than "just working" like a credit card or cash, there's an extra little head nod.

The McDonalds by my house I noticed says you can do Apple Pay in the drive thru, but there is no equipment outside to do it so you'd basically have to ask them to provide you with the equipment to do it...or hand over your credit card like everything else.

 

[MH01]

Let's be honest, here on MR we are bias towards apple and believe apple pay should become standard everywhere, though in the greater scheme of things, I doubt the masses care.

To be honest I am Caring less and less, as apple announces a lot of cool features that never go international. Only after a major announcement you realize the feature is only for the U.S.

Awesome for our American cousins, but also frustrating for the rest of us.