After 18 months, Apple Pay has made a tiny dent in the global payments market, thanks to being stuffed up by technical challenges, low consumer take-up and resistance from banks who don’t see why they should support something that makes them sod all while making Apple rich.
The service is available in six countries and among a limited range of banks but it has failed to gain much traction outside the US. Apple Pay usage totalled $10.9 billion last year and that was mostly in the US. Although the figure looks high it is really sod all when you consider how much cash is moved around in mobile payments.
In China Alibaba and Tencent made an estimated $1 trillion worth of mobile transactions last year.
Basically Apple Pay is only popular with the hard-core Apple fanboys which we estimate total six million worldwide. These are the people who do what ever Apple tells them and would buy a dog poo if it had an Apple logo on it.
Other iPhone users are not bothering with the service. Apple Pay transactions were a fraction of the $84.5 billion in iPhone sales for the six months to March, which accounted for two-thirds of Apple’s total revenue.
It has not been helped by the fact that the hardware that Apple Pay uses has been as reliable as Jobs’ Mob’s Apple IIc’s. While the do not appear to be catching fire.
In Australia, where Apple Pay launched a month ago, payment machines supported by one mid-sized bank reported frequent failures.
Apple Vice President Jennifer Bailey said such experiences were premature and not representative. “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.”
Apple is also finding that the banks are harder to roll over than the movie, music and book trade. Apple is used to telling its partners what to do, but the banks have long experience of telling politicians and businesses what they can do. Some country’s banks have even managed to negotiate lower transaction fees or have been holding out for Apple to offer something more reasonable.
Then there is the small matter that banks are starting to build their own products and don’t need Apple Pay at all. This situation is mirrored in the US where stores are starting to test their own services which will make Apple Pay redundant.