Apple Pay Steadily Winning Over Consumers

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Using consumer opinion polls about mobile payments as a barometer, it appears Apple Inc.'s winning strategy may have a lot in common with the fable, The Tortoise and the Hare.

Apple Pay, slowly and steadily, is gaining ground as a preferred method of mobile payment. And it may have a lot to do with the steady release of Apple products that support its mobile wallet.

With each new Apple product released — from last year's iPhone 6 Plus to last week's Apple Watch — Apple had a chance to re-educate consumers on how to use its devices to make payments.

Research from Changewave last week indicated that Apple Pay has gained tremendous ground against companies like PayPal in the digital wallet race. Forty-five percent of the more than 4,000 consumers surveyed preferred Apple Pay, 28% preferred PayPal and 13% preferred Google Wallet.

The research sought more information from those who said they were mobile app users, with 66% saying they were "very satisfied" with the Apple Pay service, compared to 45% of users expressing the same favorable opinion about PayPal, and 33% for Google Wallet.

Though the Changewave numbers don't address actual usage, it reinforces research released this month by Phoenix Marketing, which surveyed more than 500 iPhone 6 users and 350 who linked a payment card to Apple Pay. Of that set, 302 people used Apple Pay method at least once during the wallet's first four months on the market.

Nearly 70% of Apple Pay users plan to add more cards to their mobile wallet, while 48% felt that Apple Pay was a major factor in their general feeling of commitment to the brand, according to Phoenix.

"Apple users could be more inclined to be wallet users than Android users would," said Greg Weed, director of card research in the final services division of Phoenix Marketing International. "It's the involvement with the Apple brand that is achieving something others cannot."

Apple, it seems, can convince its loyal followers to try anything, Weed said.  Nearly 80% of Apple Pay users said the system has completely replaced their use of contactless credit or debit payment cards, according to Phoenix.

Based on the number of iPhone 6 users and the percentages of U.S. households with credit cards, Phoenix estimates that about 14 million individuals have linked a payment card to Apple Pay, with 90% of those actually using it for a payment.

Based on its current data, Phoenix predicts that the user base is likely to double during 2015, but the company and its supporters need to address usage frequency.

The percentages of consumer use of in-store and in-app purchases through Apple Pay were similar, at least on Apple's home turf, with 46% making in-store purchases at Apple stores and 45% of users making in-app purchases from Apple.

PayPal remains a formidable foe for any mobile wallet developer or non-bank entrant into the payments landscape, particularly as it prepares to split from eBay this year.

There are two key factors working in PayPal's favor, Weed said. "First, 74% of smartphone owners own a PayPal account and, second, PayPal is agnostic with regard to an operating system and method of in-store payment technology," he said.

Research earlier this year from Strategy Analytics indicated that Apple Pay was in the right place at the right time because of NFC even before Apple officially revealed its entry into mobile payments. That research found that nearly 50% of consumers with some knowledge of mobile payments had initiated contactless NFC transactions through smartphones, with 75% of those saying they were "very satisfied" with the experience.

The recent revelations about Apple Pay and PayPal follow several months of comparisons between two companies that Forrester Research had declared as best positioned for the upcoming marketing and aggregation phases of the mobile wallet race.

The Changewave and Phoenix numbers come at a time when Google Wallet is on a revival mission. Google has always been able to bank on dominating the Android operating system, which has more users than Apple does in the U.S. and worldwide.

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