- Apple Pay this year will overtake coffee chain Starbucks in providing the most popular mobile payment method for shoppers at U.S. stores. Apple's payment app this year will have 30.3 million U.S. users, compared with 25.2 million for the Starbucks payment app, research firm eMarketer estimated.
- Apple Pay also will be more popular than other point-of-sale (POS) payment methods, such as Google Pay, which has 12.1 million users, and Samsung Pay with 10.8 million users. The payment services are growing with the broader adoption of in-store systems that work securely with the near-field communications (NFC) chips in smartphones.
- Proximity mobile payments, as contactless payments are also called, will more than double to $220 billion by 2023 from $98.9 billion in the U.S. this year. The number of people who use smartphones to make in-store payments will grow 9.1% this year to 64 million, or 30% of all U.S. smartphone users, eMarketer forecast.
U.S. consumers have been slow to adopt contactless mobile payments compared with other regions, such as urban areas of China, but eMarketer's research suggests that growth is picking up as more stores add the technology to their POS systems. Unlike China, the U.S. for years built up the infrastructure to handle debit and credit card payments, making them an easy alternative to cash and checks. However, tech-savvy young adults who grew up with smartphones have shown a greater willingness to use mobile devices for payments, driving the popularity of apps like PayPal's Venmo, which had 40 million users as of Q1, CNBC reported.
Starbucks was a pioneer in rolling out contactless payment methods for its U.S. customers, offering millions of people their first experience with in-store payments. Starbucks Pay is still growing strongly, per eMarketer, demonstrating that store chains can successfully set up a proprietary payment system that gives them more control over purchase data. Walmart, as another example, created a payments app that's integrated with in-store payments and online orders for delivery and pickup.
Apple Pay was launched five years ago, when contactless payments made up about 19% of all retail sales, and faced challenges in boosting adoption among consumers and retailers. Apple Pay is reaching a turning point, though, and is expected to be available in 70% of U.S. retailers by the end of this year, per eMarketer. That should help the company to grow its payments business, especially after the recent launch of its Apple Card in a partnership with Goldman Sachs.