Black Friday’s Payment Method Showdown: How Did Mobile Wallets Fare?

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It’s the weekend after Black Friday, and the InfoScout team is busy analyzing millions of receipts to report on where people shopped and what they bought. But what about how consumers paid for those Amazon Fire tablets and Fitbit trackers? With the rise of mobile wallets like Apple Pay, Android Pay, Samsung Pay, and PayPal, we wanted to find out if this Black Friday would be the shot heard round the world for mobile payments.

 

With 300,000 Americans submitting pictures of receipts through apps on their smartphones, InfoScout can identify exactly what type of devices they’re using, down to the model numbers. This allows us to study transactions made by people who actually have the capability to use mobile payment technologies such as NFC exclusively at stores with compatible point-of-sale (POS) terminals. For Apple Pay, this qualifies owners of the iPhone 6 and above. On the Android side, the device market is far more fragmented, so we limited our study to owners of fairly equivalent devices: the two most recent versions of Google’s Nexus phones, the LG G3 and G4, and the Samsung Galaxy S5 & S6.

 

We found Apple Pay usage at its lowest rate since we’ve started tracking it, being used for only 2.7% of Apple Pay-eligible transactions. This is a fairly marked decrease from what we saw last year on Black Friday, when iPhone 6 owners used Apple Pay for 4.9% of eligible transactions at participating merchants. Of course, back then the primary owners of Apple Pay-enabled devices were early—and technologically curious—adopters, whereas now the technology is in the hands of the broader population. Below you can see the usage over time in our quarterly Apple Pay tracking reports.

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On the Android side of the table, we saw an even lower rate of mobile wallet usage – just 2.0% of eligible transactions. This was our first time investigating mobile wallet usage among Android owners and we were interested to see that of all the mobile wallet options available, it was actually PayPal that came out on top on Black Friday. Since Android Pay and Samsung Pay were both released within the last three months, we may see this picture change as time goes on.

So what was the most common way shoppers paid for their Black Friday bargains? Plastic. This year, 79% of iPhone users and 74% of Android users paid with their credit and debit cards on 2015’s iconic shopping day, and that doesn’t even count the mobile wallet transactions that were funded by credit/debit cards.

How Android and iPhone users paid for their Black Friday purchases.

Apple Pay’s Black Friday, By The Numbers

Here at InfoScout, we love data.  And we love mobile technology.  So it shouldn’t surprise anyone that we’ve put on our analytics hats to learn how the hottest new player in mobile payments, Apple Pay, performed in the Super Bowl of shopping: Black Friday.  To do this, we tracked the shopping behavior and opinions of those in our 170,000 household consumer panel who own an iPhone 6 / 6 Plus and shopped at a retail store that accepts Apple Pay this Black Friday weekend.

Despite its hype within the tech community, Apple Pay still has a lot of ground to cover.  Out of all Apple Pay-eligible transactions on Black Friday, the new NFC-powered mobile payment method was used less than 5% of the time. Let’s explore the details behind this number and what the landscape looks like in terms of Apple Pay usage.

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According to these real-time shopper surveys data, just over 9% of the iPhone 6 and 6 Plus users who shopped on Black Friday have ever tried using Apple Pay at checkout.  Among those who have used Apple Pay, there was a 50-50 chance that they would use it at checkout when shopping at a participating retailer on Black Friday.  To understand the “why” behind this behavior we explored the extent to which the product or experience itself was the culprit.  We asked Apple Pay users what they thought of it as compared to swiping a card, and found overwhelmingly positive reactions to the experience.

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If Apple Pay users have had such positive experiences, why did only half of them use Apple Pay when given the chance on Black Friday?  Well, we figured they’d know best… so we asked them.

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The biggest piece of the puzzle is simple: they were unaware that the store accepted Apple Pay.  The second-most common reason is that they simply forgot. This isn’t necessarily surprising; the checkout process has become habit for most, and integrating mobile payments into your purchase flow requires change to a very deeply ingrained pattern of behavior.  These two data points highlight Apple’s need to find a way to capture mindshare at checkout, and to remind or inform the user that the purchase could be made with Apple Pay.  Of the two icons currently in use at Apple Pay-accepting stores, only one actually has any Apple branding, and both are fairly subtle and unlikely to grab attention.  If there were a more prominent display, Apple could feasibly increase Apple Pay usage by over 40% – simply by having its user base behave more consistently.

 

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Either of these two icons can be seen at retailers accepting Apple Pay, but only one of them directly refers to Apple Pay.

Taking a step back, however, we see that the biggest opportunity is for Apple Pay to drive adoption among the 90% of iPhone 6 and 6 Plus users who have yet to try it – despite shopping at stores that accept Apple Pay.   InfoScout’s survey of these potential users yielded some interesting results…

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A whopping 32% of eligible users haven’t tried Apple Pay because they aren’t familiar with how it works, and 11% simply haven’t heard of it.  That means that nearly half of people who are eligible to use Apple Pay can still be influenced via informational outreach or educational advertising. We’ve already seen that most users who pay with Apple Pay find it to be easier and faster, but now Apple needs to better inform their potential user base of these benefits.  Bonus points to Apple if they can use that same campaign to address any security concerns users may have.

Even with all this data in hand, it is very evident that Apple Pay is still a nascent competitor in the payments industry.  Apple Pay has only been around for 5 weeks, and with over 70 million Apple Pay-capable iPhones expected to sell in Q4 of this year, adoption of Apple Pay may shift drastically as more people upgrade their devices and the positive word-of-mouth from existing users spreads.

We’ll be tracking it all, so stay tuned in to all the action by subscribing via the button above.