VAR Opportunity: Apple Pay Leads PayPal, Mobile Payments Use Grows, Evolves
By Christine Kern, contributing writer
About 45 percent of smartphone users who are using mobile payment apps now probably are using Apple Pay, while 28 percent will use PayPal, according to a study from 451 Research. Google Wallet trails at 13 percent. The survey is based on the responses of 4,168 participants in March who answered the question, “How likely are you to use mobile payment apps to make purchases over the next 90 days?”
“Our latest survey shows planned use of ApplePay has been on an upward trajectory since it became available six months ago — with the service helping to spark consumer demand for mobile payment technologies,” explains Andy Golub, survey research director for 451 Research.
The research report shows comparisons to survey responses about a year ago — when PayPal topped Apple Pay as the payment app of choice 54 percent to 19 percent.
“The introduction of Apple Pay has catalyzed a wave of strategic moves across the mobile payments ecosystem,” said Jordan McKee, 451 Research’s senior mobile payments analyst. “Moving forward, the pace of activity will only accelerate as vendors look to capitalize on the growing contactless payments infrastructure and secure a foothold in this rapidly evolving sector.”
The survey also looked at users’ perceptions of security, with 24 percent of respondents saying they believe mobile payments are more secure than traditional credit cards, and 27 percent believing they are less secure. 451 Research points out, this is a “major 26-point improvement since a year ago.”
The study also investigated overall consumer interest in Samsung’s mobile payment service set to launch this summer. Among survey respondents, 8 percent were “very or somewhat likely” to use Samsung Pay in the future. Among Samsung smartphone owners that number increases to 25 percent and among those planning to buy a Samsung smartphone this spring, that number increases to 46 percent.
As mobile wallets gain popularity in the payment world, VARs and ISVs can take steps to position themselves to capitalize on the new trend, as this article from Business Solutions Magazine explains. Sid Singh, president of OpenEdge (a division of Global Payments) tells BSM that the wallet that provides the best consumer experience will win the battle.
“Consider the range of related services: antennae to determine your location in relation to your favorite stores; NFC [near field communication] to enable speedy, contactless payment; apps providing instant ordering and payment; relevant offers and discounts; and security,” he says. “Yet, there is still something missing from the majority of wallets — the ability to leverage consumer transaction data into targeted offers that increase the reach and frequency of purchases at merchant locations. Many have pieces and parts of the required data, but overcoming this obstacle will shatter the glass ceiling of adoption.”
According to Singh, the industry will see most plastic supplanted by the mobile device in the near future, stating “Globally, more people own mobile phones than toothbrushes,” he says. “That’s a statistic VARs, ISVs, and payment companies simply can’t ignore.”