Although there is no question today that mobile payments are increasing, to what degree is challenging. This confusion was magnified this month when Bloomberg quoted the Aite Group as saying that ApplePay accounts for one percent of all U.S. retail transactions.
Aite denies ever having said that—the analyst said that he said that it was much lower than one percent—and indeed Aite says that Apple Pay represents a tiny fraction of one percent of current U.S. retail sales. IDC estimates that Apple Pay today accounts for about one-tenth of one percent of all retail in-store transactions in the U.S., while Javelin puts that figure at about half—roughly one-twentieth of one percent.
When moving from Apple Pay to Google Pay, the estimated slices get even thinner. Crone Consulting president Richard Crone sees Google Pay representing about one-third of Apple Pay transactions. IDC analyst James Wester put Google Pay’s figures in an even more vague area: “Google Pay is so small to be incalculable. I can’t even estimate what it is because it is so small,” he said.
Crone also examines the Apple Pay marketshare question from a different perspective, examining its share of all contactless payments. With that limit—and excluding in-app as well m-commerce and e-commerce using ApplePay—he gives Apple Pay 75 percent of all contactless mobile payments, worth about $5.2 billion at U.S. physical POS in 2015. (For what it’s worth, Crone projects that about 66 percent of those payments are based on credit, rather than debit.)
But what do all of those numbers actually mean to payment facilitators? Not much. And, interestingly enough, that’s a good thing.
All of these analyst firms do a wonderful job, given the limited numbers they have to work with. To be fair, though, they are very limited numbers. Let’s consider just Apple Pay. There are only two places for complete stats on how Apple Pay is doing. There’s the best source, which is Apple itself. True to its traditions, One Infinite Loop isn’t talking.
The only other place for comprehensive—not complete—numbers would be to get as many Apple Pay-accepting retailers to talk and to reveal their complete numbers. That’s not happening, either, beyond a few generic anecdotes. And even if retailers shared their complete Apple Pay numbers, it wouldn’t generate a very complete picture unless most retailers did.
Therefore, without Apple or extensive retail Apple Pay stats, analysts are forced to extrapolate from surveys and some processor numbers and some bits and pieces here and there. That’s better than nothing, but it certainly doesn’t generate a precise complete picture.
For payment facilitators, that is far from bad. That is because nowhere is it more true than with mobile payments that perception is reality. Without hard stats, retailers and consumers alike make their decisions based on what they see around them.
With retailers, support has a multiplicative quality. Every time one or two more retailers support NFC payments, the pressure on all others to start accepting NFC becomes that much more intense.
On top of that, we have geographic perceptions. Apple Pay support is strongest in cities and areas of high-tech comfort—and especially where the two intersect, such as in places like San Francisco, Manhattan, Boston, Seattle and Austin. Residents and visitors to those cities are almost guaranteed to assume that NFC acceptance is as prevalent everywhere as it is locally.
If real national figures were published, those perceptions would be shattered—much to the detriment of mobile payments efforts everywhere.