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Apple Pay leads digital wallet race

News, 03 March 2016

NEW YORK: Apple Pay is leading the race for adoption among merchants interested in mobile payment services, according to a new study.

Piper Jaffray, the investment bank and asset management firm, surveyed 507 merchant processing channel partners about current attitudes towards digital wallets.

And it found that 44% of point-of-sale merchants are already using or would consider utilising NFC payment terminals, which let consumers complete transactions via connected devices like smartphones and smart watches.

Within the audience of early or potential adopters, fully 67% were interested in Apple Pay, which went live in America in October 2014.

Android Pay and Google Wallet registered just 18% on this metric, with PayPal posting 8% and Samsung Pay logging 7%.

"We believe it is telling that PayPal, who has been the leader in digital payments, so significantly under-indexed Apple Pay and Android Pay," Gene Munster, an analyst at Piper Jaffray, stated in an investor note.

Despite the fact Apple Pay occupies an enviable position relative to its rivals, Munster suggested the product remains a long-term play for the company.

"We expect less than 1% of Apple's revenue and earnings in 2017 will be Apple Pay related," he argued. "Apple Pay's significance is an engagement tool, which longer term is a must have for any successful phone as cash slowly goes away."

At present, this tool is supported by over 1,000 card issuers and two million point-of-sale locations in the US alone.

In terms of uptake, Crone Consulting has reported that Apple Pay boasts over 12 million monthly users globally, with Android Pay and Samsung Pay on around five million apiece.

Speaking on a recent conference call with investors, Tim Cook, Apple's CEO, also struck an optimistic note about its prospects in the payments space around the world.

"Consumers have spent billions of dollars with Apple Pay. In the second half of 2015, we saw a significant acceleration in usage, with a growth rate ten times higher than in the first half of the year," he said.

Data sourced from Barron's/Fast Company/SeekingAlpha; additional content by Warc staff