The mobile pay competition is heating up. The trouble is smartphone users do not use the pay apps. As the following Slate article reports, Apple Pay is trying to change that.
There’s a reason everyone seems to be getting into mobile payments. Thanks to increasing smartphone usage and a push for faster, simpler, more secure financial transactions, mobile payments could become a $3.4 trillion industry by 2022. In the U.S. last year, eMarketer estimated it to be a $49 billion market already.
The consumer options are sundry: There’s Apple Pay, Samsung Pay, and Google Pay; PayPal, Venmo, Square, and Square Cash; bank-backed alternatives like Zelle and Chase Pay; and in-app options through things like WhatsApp or Facebook Messenger. As consumers abandon cash, checks, and even credit cards, everyone is jumping into mobile payments—but perhaps none with the zeal of Apple.
First introduced in October 2014, Apple Pay has become one of the leading digital payment services for U.S. consumers, but it doesn’t yet dominate the global market. Chinese competitors WeChat Pay and Alipay have a combined 1 billion users, followed by PayPal with 210 million users and Apple with 87 million, as of August 2017. Apple is aggressively working to close that gap using a number of different tactics, and it’s working—kind of.
The U.S. mobile pay market, unlike in China with Alipay and WeChat Pay, is very fragmented. In addition, consumers here still have muscle memory with their plastic cards. Apple Pay and Google Pay are the most recognizable brands for the universal pays but have not made enough of a marketing push for more adoption. That may change as Apple Pay is stepping up its game with more promotional offers to use its smartphone app. Google Pay will not be sitting idly by, so sit back and watch the fun as the two heavyweights square off in search of a much larger piece of the mobile payments pie.
Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group