digital wallet – Auriemma Group

(New York, NY): For over a year after its introduction, Apple Pay was the only real option for consumers who wanted to pay with their smartphone. That changed towards the end of 2015, when Android Pay and Samsung Pay were rolled out. Among the three payment options, Apple Pay captures the greatest proportion of eligible users, with 33% of iPhone 6 owners* reporting that they’ve used it, but the fledgling Samsung Pay isn’t far behind at 23%, according to recent research by Auriemma Group. The firm’s latest Mobile Pay Tracker found that Samsung Pay users report higher satisfaction levels and fewer issues at the point of sale compared to Apple Pay, with near equal proportions recommending both mobile payment brands.

Since its inception, Apple Pay has attracted educated, affluent, and young users, and Samsung Pay users look similar. “Only the newest, and most expensive, models of phone support mobile payment, so owners tend to be affluent,” says Marianne Berry, Managing Director of Auriemma’s Payment Insights practice. “Owners of the Samsung Galaxy and Note look demographically similar to owners of the iPhone 6 series, although iPhone owners are almost evenly divided between men and women, whereas Android phones, Samsung included, tend to skew male.” Within the pool of eligible phone owners, mobile pay users are even more affluent and well-educated than non-users.

Users of both mobile pays rate their experience positively, but Samsung Pay users report higher levels of satisfaction than their Apple Pay counterparts (92% vs. 84%) and are near equally likely to recommend the application (49% vs. 53%). “The impact of satisfaction becomes more telling when we examine how these users pay for their monthly purchases,” says Berry. “The majority of Samsung Pay users utilize other payment methods less since beginning with Samsung Pay. No other mobile payment application can say that.” In fact, Samsung Pay eligible consumers report the highest proportion of discretionary spend going to the payment app (22%), while Apple Pay eligible consumers cite a lesser proportion (15%), behind both credit card and cash spend.

Samsung Pay users also spend more using the service ($82 vs. $75) within an average week. They report fewer difficulties at point of sale (19% vs. 31% for Apple Pay), presumably due to the technology that mimics the magnetic stripe and allows it to be used at a much wider range of merchants. “Samsung Pay advertising highlights this benefit, and 37% of those who are aware of this have used the method where other mobile pays aren’t accepted,” says Berry.

Where signage isn’t easily viewable, Samsung Pay users show greater enthusiasm to use the method in-store, with 56% always asking store personnel about acceptance compared to 42% of Apple Pay users. “Some of this may be due to its newness, with most Samsung users reporting three months of experience compared to a year for Apple Pay,” says Berry. “Even so, Samsung Pay outscores Apple Pay on a number of metrics. Right now the pool of eligible Samsung users is much smaller than Apple’s, but as more Samsung phones are upgraded, the application’s broader merchant acceptance has the potential to more quickly convert its smartphone owners to Pay users.”

Survey Methodology

The study was conducted online among 2004 consumers in the US with Apple Pay eligible (n=1,000), Android Pay eligible (n=838), and/or Samsung Pay eligible (n=327) smartphones between March 3 – April 7, 2016. Respondents were screened to own an iPhone 6/6+/6s/6s+ or Apple Watch (in combination with an iPhone 5/5C/5S)* – a Samsung Galaxy S6, S6 Edge/Edge+, S6 Active or Galaxy Note 5 – and/or other Android phone with KitKat (4.4) OS or newer. All respondents also have a general purpose credit card in their own name. In addition to the quantitative web survey, twenty in-depth interviews (IDIs) were conducted March 21, 2016 – March 25, 2016 via telephone with Android Pay and Samsung Pay users recruited from the quantitative web survey. For this round of IDIs, the focus is or was on the Android and Samsung Pay users, and their usage and experience thus far.

About Auriemma Group

Auriemma is a boutique management consulting firm with specialized focus on the Payments and Lending space. We deliver actionable solutions and insights that add value to our clients’ business activities across a broad set of industry topics and disciplines.

(New York, NY): The use of mobile payments is continuing to grow and broaden, as nearly half (46%) of iPhone 6 owners have successfully used Apple Pay, up from 42% just two months ago. The latest wave of Auriemma Group’s bi-monthly Apple Pay Tracker, which interviews a fresh sample of 500 iPhone 6 owners every 8 weeks, also finds high levels of repeat usage, with 63% reporting that they use Apple Pay at least weekly.

“The Apple Pay base is broadening from the tech-savvy early adopters,” says Marianne Berry, Managing Director of Auriemma’s Payment Insights practice. In Wave 1 (conducted between January 26 – February 6, 2015), 70% of Apple Pay users identified themselves as people who “like to be the first to have the newest model phone.” In Wave 2, conducted April 10-20, that figure had dropped to 55%, indicating that less tech-oriented types are now trialing mobile payments via Apple Pay.

Consistent with the finding that the newer users might be less technologically adept, a significant number are reporting problems in set-up. The April survey found that 45% of respondents reported having issues setting up Apple Pay. “Among those who reported issues setting up Apple Pay, 62% acquired their iPhone in 2015, compared to 38% who got their iPhone in 2014,” Berry noted.

Despite these issues, user satisfaction is very high, and their main complaint is the lack of retail venues accepting Apple Pay. 67% of those that have used Apple Pay in a brick and mortar store say they are migrating to merchants that accept Apple Pay. And 51% say that they are using other payment methods, such as cash, less often since they began using Apple Pay.

“Mobile payments still comprise only a small fraction of overall payments volume,” said Berry, “but Apple Pay is the first service to garner double-digit numbers of users. As the upgrade cycle gives more consumers access to Apple Pay, and Android Pay comes to market, the long-awaited transformation of the payments industry may finally have begun. It will be interesting to see how US adoption patterns compare to those in the UK and in Canada—markets with higher penetration of NFC and contactless cards—when Apple Pay is rolled out there.”

Auriemma’s Apple Pay Tracker conducts an online survey of 500 randomly selected iPhone 6/6+ owners every 8 weeks, accompanied by qualitative telephone interviews; the full study is available through an annual subscription. Data reported above comes from interviews conducted April 10 -20, 2015.

About Auriemma Group

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