Report: In-App Payments Vital for Wallet Adoption

Jan. 14, 2016

Report: In-App Payments Vital for Wallet Adoption Much of the discussion of Apple Pay has surrounded the in-store experience, but the results of a recent survey indicate that in-app use of Apple Pay may have a bigger role in the payment method’s success than many would have thought. Phoenix Marketing International, which has engaged in an ongoing tracking study of Apple Pay adoption and use, found that in-app payments accounted for 38 percent of total Apple Pay transactions in the 12 months after its September 2014 launch. Given some of the highly publicized problems with the user experience at the point of sale and a slowing rate of adoption after the initial blitz, Greg Weed, director of research at Phoenix Marketing International said the in-app side of Apple Pay will be a critical piece of building transaction volume, especially as other wallets have crowded into the space.

“The general purpose mobile wallets are struggling for mass adoption,” Weed told “There have been issues surrounding the in-store environment that have led to that. There is only one major retailer (Whole Foods) that has Apple Pay acceptance at 100 percent of its locations. So, many retailers that say they accept Apple Pay don’t at all their locations. Also, a majority of users encountered some sort of friction at least one time.”

The environment for making in-app or online purchases, however, is quite different, he said.

“It’s more private for making a transaction and inherently more popular for mobile. It’s a comfort factor facilitating the importance of in-app,” Weed said. “As a result, in-app is an important adjunct to building mobile transactions for Apple Pay and the other wallets. It’s not subject to the same problems and issues of in-store. So it helps achieve a pocket of growth that will be not only important now, but as it continues to grow.”

Not surprisingly, Apple is the retailer with the highest percentage of Apple Pay users who have made an in-app purchase (43 percent). Thirty-six percent of Apple Pay users have made a purchase in Target’s shopping app, while 29 percent have done so while using the Nike app.