"To some extent, Apple Pay is riding the wave of NFC adoption where merchants have come on board by default with contactless NFC terminals" to reduce their liability by October 2015, Litan said.
Slow growth predicted, as consumers show interest
Whatever is causing Apple Pay's early success, it is gratifying for an industry that has seen years of slow starts, including when Google Wallet kicked off three years ago. Interest in Apple Pay is expected to help other mobile wallet players in the U.S., where in-store mobile payments lag far behind other countries such as Japan and Korea.
A recent survey of 1,000 U.S. adults conducted from Nov. 3 to Nov. 10 (after Apple Pay's Oct. 20 launch) found that 56% said they would be interested in using a mobile device to pay for a gift or other item in a retail store this holiday season. Almost the same number said retailers should offer some kind of mobile payment option.
"Though the majority of shoppers have yet to use mobile pay, they do see it as an increasingly useful way to pay in-store, particularly during busy shopping periods," said Pat Dermody, president of Retale, the company that conducted the survey. Retale offers a location-based mobile app and website to aggregate weekly retail circulars to help buyers find bargains.
Even though Retale's survey found support for mobile payments, it rated Apple Pay well behind PayPal. When asked which mobile payment service they would most likely use in-store, 51% named PayPal, followed by their own bank's mobile payment app with 21%. Apple Pay came in at 10%, followed by Google Wallet at 8%, which tied with "a retailer's app." CurrentC, a service coming in 2015 and backed by large retailers, was mentioned by just 2%.
"I do think a lot of people will experiment during the holiday, using a mobile device to aid in finding a store or checking a price, but that's not to say people are ready to translate that experience into people making mobile purchases," Olynick said in an interview.
In the next two to three years, he predicted a large percentage of smartphone owners will occasionally use a phone to make a purchase. "The momentum is in the right direction and it's not just with Apple Pay, but with Softcard and Google Wallet. You are seeing more interest in all three. A rising tide raises all ships."
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