Why Is Apple Pay Struggling Despite Recording $10.9 Bln Worth of Transactions In 2015 ?

Must Read

Happy B’Day Gordon Moore: One Of The Founding Fathers Of Silicon Valley

Gordon Earle Moore co-founded the paramount Intel Corporation (NASDAQ: INTC) with Robert Noyce in July 1968, which is worth $204.16...

WhatsApp Might Lose 60 Million Indian Users Post Updated Policy Changes, New Survey Reveals!

The Facebook-owned instant messaging platform’s decision to update their privacy and terms of service brought about a...

Uber and Ola In Hot Water: India Authorities Launch Fresh Probe!

The Directorate General of Goods and Services Tax Intelligence (DGGI) sent a summons to Uber and Ola...

Apple Pay recorded $10.9 billion worth of transactions in 2015 according to a report from Reuters. The adoption and usage rate of Apple Pay is enthralling in the US alone but unfortunately, outside homegrown market, it has failed to impress smartphone users.

A majority of Apple Pay users are ‘core Apple followers’. The prime reason for the low adoption rate of Apple Pay internationally is due to some technical issues, resistance from banks and low consumer take-up. Apple Pay is available in six countries but the main problem for the digital payment solution is its availability with a limited number of banks.

The company, however, is leaving no stone unturned to strengthen its global presence and adoption. Recently, Apple has roped in some new banks in Canada, New Zealand and Australia to benefit a wider range of consumers.

Advertisements

Apple Pay’s transactions are like a drop in an ocean when compared to the mobile transactions that were carried out through Alipay and Tencent which amounted to a whopping $1 trillion, a majority of it in China alone, according to iResearch.

For those who may wonder why is Apple Pay so significant to discuss, Apple Pay allows a seamless payment option secured by fingerprint. A user just has to tap his iPhone with content less reader in store and unlock his iPhone using his fingerprint and the payment is done. Apple Pay can be used anywhere from Grocery stores to hotels and it even allows payments for the apps on iStore.

Apple Pay: The prime hurdles

Apple’s services segment brought in enthralling revenue for the company in fiscal Q2 2016 despite the falling iPhone sales. Apple views its services segment as a new ray of hope that will eventually help Apple to weather the storms of its falling revenues.

The main hurdles, however, for Apple Pay are technical glitches and less adoption by the banks. After a month of Apple Pay’s launch in Australia, one of the mid-sized bank’s payment machines reported some technical glitches in its operation.

“Bendigo Bank is experiencing some unforeseen technical issues in accepting Apple Pay payments at selected merchant terminals,” reported by Reuters.

Jennifer Bailey, Apple Vice President, emphasises the issues being premature and will take some more time before one can have a seamless experience.

Advertisements

“Like any set of major technology changes, it takes time. We want to move as quickly as possible, we push it as quickly as possible.” Jennifer Bailey retaliated.

Apart from these issues, overseas banks are persuading Apple to lower down its fees for transactions. Thus, the rollout is even slower due to negotiations.

Apple Pay is facing intense competition at its major overseas playground, China, by some indigenous payments methods that include WeChat Payment, Ali Pay etc. Apple charges 0.15% per transactions in the US whereas the silicon tech giant had to negotiate on its percentage in China at 0.07% per transaction that are through Apple Pay.

According to Windsor Holden, Juniper Research Analyst, a big chunk of Britain’s expenditure, around $14 billion, was paid off through contactless cards in 2015. A whopping 86 million contactless cards have been issued in Britain. Persuading such a large number of people to incorporate their cards in Apple Pay is a tuff ask when one can easily pay via contactless card. Piercing such a substantial market with a new payment would be a tuff task ahead for Apple. The case in Australia is no different, 60% of all the card transactions are via contactless cards thus road blocking Apple’s dreams.

A number of banks in Canada, Britain and Australia are betting on their own payment products in spite of partnering with Apple. And the situation in emerging markets, likes of India, is no different as well.

There’s something to smile for Apple

The slow adoption has spurred Apple to search for greener pastures. The upshot for Apple is that it is well ahead of its Apple Pay’s rivals like Android Pay and Samsung Pay. Samsung Pay is just available in 3 markets including China, the US and South Korea whereas Android Pay has arrived in the US in March and Britain in April.

Besides, industry analysts are bullish about the growth of mobile payments in future. The global mobile payment market is estimated to hit $620 billion in 2016 and is expected to surpass the $1 trillion mark by 2019.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News

The Slip-Ups Keep On Coming: WhatsApp Web Users’ Mobile Data Leaked On Google

As the developments have unfolded over the past week, the clock for WhatsApp seems to be ticking...

Trump Administration Has Landed Its Final Blow On Chinese Companies: Xiaomi Blacklisted!

In its recent move to safeguard national security, the United States’ Trump Administration has decided to go after China’s second-biggest smartphone marker...

Huawei Is Gunning For Acquiring A Fifth Of Android’s Userbase With Its Own HarmonyOS!

After Google’s ban on Huawei in 2019, the Chinese-origin tech company is all set to roll out HarmonyOS later in 2021 as...

Battle Lines Are Drawn: Qualcomm’s Latest Acquisition to Challenge Apple, Intel

The quest to gain supremacy creates a butterfly effect for sure. With the challengers and the champion pulling out all stops to...

After Ola and Uber, Now Swiggy And Flipkart Under Probe For Tax Evasion: What’s Brewing?

A few days ago, reports emerged about Ola and Uber coming under the scanner of Directorate General of Goods and Services Tax...

India’s Biggest IT Firms Reported Sharp Jump in Employee Hiring In FY Q3 2021

India's IT sector has been on a steady rise after the turbulence the first half of 2020 caused. On Wednesday, major IT...

In-Depth: Dprime

Will ‘TikTok By Microsoft’ Be A Winner?

For the last two years, TikTok has been in the public eye for all sorts of reasons. First, it was the exploded...

Facebook Subscription Model: Looking Beyond Ad Dollars?

Seldom do job listings create a stir this gripping. However, when the job listing in question is a stealth post from Twitter,...

Will The Online Food Delivery Market in India End Up Becoming A Two-Horse Race?

It's pretty much evident that the food delivery space in India is all set to get riled up soon enough as one...

More Articles Like This