Thursday , January 23, 2020

Apple Pay Bucks Starbucks From the Top of the Mobile-Payments Heap

The number of Apple Pay users has surpassed that of the Starbucks mobile-payments service, says eMarketer Inc., marking the first time a general-purpose mobile app has become more popular than the coffee retailer’s.

New York City-based eMarketer counted 30.3 million U.S. Apple Pay users, while Starbucks had 25.2 million users. Trailing were Google Pay, at 12.1 million, and Samsung Pay, 10.8 million. 

Apple Pay’s users represent 47.3% of all proximity mobile-payment users, while users of the Starbucks mobile app account for 39.4%, eMarketer says. 

Apple Pay relies on near-field communication technology that enables a two-way wireless connection between an iPhone and an NFC-equipped point-of-sale terminal. The Starbucks app uses a quick-response code generated in the app to be scanned at the checkout.

Apple Pay may be starting to benefit from the proliferation of NFC-equipped terminals. As the payment card industry converted to EMV chip cards, many device makers included NFC in addition to the chip reader. 

“In addition to the spread of NFC terminals, Apple Pay is growing in popularity among a growing share of the smart-phone user population, iOS users,” says Vincent Yip, eMarketer junior forecasting analyst. “Since they are becoming more comfortable with using mobile proximity payments in general, it will drive even more growth in Apple Pay use.”

This broad availability of compatible POS equipment may continue to aid Apple Pay and its brethren because the Starbucks app can only be used in Starbucks stores. Apple Pay is a funding option for the Starbucks app.

Another factor is convenience driving mobile payment use, Yip says. “In particular, Apple Pay users are driving the largest growth in this desire for payments convenience,” he says in an email to Digital Transactions News. “Merchants should know that not having this alternative payment available means they don’t have the option that more than a quarter of iOS smartphone users regularly use.”

Yet, the key to the growth is consumers. “Sustained growth in Apple Pay use will come from non-users being convinced that mobile proximity payments are more convenient to use than other in-store payment methods,” Yip says.

EMarketer forecasts that total spending this year via proximity mobile payments will approach $100 billion in the United States. On average, a consumer will spend $1,545 per year using a mobile-payment app. The research firm expects the total number of U.S. proximity mobile-payment users to reach 64 million in 2019, representing almost 30% of all smart-phone users.

Seattle-based Starbucks Corp. launched its mobile payment app nationally in 2009. Apple Pay debuted five years ago.

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