Apple Not Worried About Apple Pay’s Slow Adoption, Believes on Path to Replace Cash and Cards

Apple's trouble with getting a wide array of its users, retail partners, and banks to adopt Apple Pay has been highlighted in a new article today by The Wall Street Journal, which also underlines a belief from Apple executives that the service's growth is adequate and that Apple Pay could soon become consumers' "primary payment system," in lieu of cash and credit cards.

Data collected from technology research firm Creative Strategies reported that 40 percent of U.S. consumers have raised concerns about security risks of adding a credit or debit card onto their iPhone, while more than 60 percent aren't even familiar with contactless payments.

While data from a recent Nilson Report noted that Apple Pay's rate of acceptance has "more than doubled since 2015," only a third of stores based in the U.S. have accepted it as a form of payment. Many well-known companies have rolled out support for the service, including Best Buy and Whole Foods, but there remain notable absences from Apple Pay's retail supporter list, namely Target and Wal-Mart.


Braden More, the head of partnerships and industry relations at Wells Fargo, asked, "If you can’t use it everywhere, why are you going to switch?" This reticence by consumers to jump in on Apple Pay's launch is said to have permeated within the company surrounding its debut, to the point where Apple executives "were reluctant to promote it." Apple Pay has been noticeably absent from the company's advertising strategy since its launch, with just two Apple Pay-focused commercials being made in nearly three years.
Apple expected consumers to embrace Apple Pay as energetically as they did iTunes—an instant hit when it launched in 2003—because executives felt it was faster and safer than existing payment systems, a former employee on the project said. When retailers didn’t support it initially, the person said, Apple executives were reluctant to promote it and invest in retail terminals that would spur adoption.
More recently, the company has become less concerned with Apple Pay's slow adoption over the past few years, because it still sees the mobile wallet as a nascent service whose domination over the industry will come with time. "Does it matter if we get there in two years, three years [or] five years?" Apple senior vice president Eddy Cue said in an interview. "Ultimately, no." Cue compared Apple Pay's adoption as faster than other mobile wallets and thinks it could go so far as to replace cash, debit and credit cards as a primary payment system.

Until that happens, Apple Pay vice president Jennifer Bailey is working on beefing up the company's retail training so that users aren't more knowledgable of paying with the service than employees. The company is said to be working with retailers to add Apple Pay instructions into work manuals as a way to spread knowledge of the mobile wallet's check-out process.

Apple Pay made $30 million for the company in the last fiscal year, accounting for a small portion of Apple's total services business, which made $24.35 billion in total in the same period. While adoption is low and consumer knowledge remains slim, Apple's services business -- which includes iCloud, the App Store, iTunes, and more -- has become a point of focus for the company, so much so that it expects to double its revenue in this area by 2021, Apple Pay expectedly included.

For this reason, David Roberts of Nilson said that Apple Pay is right on the cusp of a wider, "ubiquitous" acceptance.
Nilson Report publisher David Robertson said that with about a third of U.S. retailers adopting it, Apple Pay is on the cusp of broad acceptance. “It’s going to become so ubiquitous that we will all do it,” he said.
Notably, the rest of 2017 is a big year for Apple and Apple Pay, as the year marks the three-year anniversary of Apple Pay, as well as the end of three-year contract agreements that the company made with banks and credit card issuers back in 2014. Apple will begin negotiations to renew these contracts for the next few years, which the company hopes to be a major contributing factor in helping to double its services revenue over the next four years.

Related Roundup: Apple Pay
Tag: The Wall Street Journal

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iPhone 8 Will Have Curved OLED Screen and USB-C Connector

Apple's upcoming iPhone 8 will feature a curved OLED display made by Samsung to differentiate it from two additional new iPhone models, according to The Wall Street Journal.

Tuesday's report corroborates previous claims from KGI Securities analyst Ming Chi-Kuo that Apple will release three devices this year: Two 'S' cycle iPhones with LCD displays to succeed the current iPhone 7 and iPhone 7 Plus, as well as a special "10th Anniversary Edition" iPhone 8.


Apple Inc. has decided to adopt a flexible display for one model of the new iPhone coming out this year and has ordered sufficient components to enable mass production, people familiar with the matter said.
According to WSJ's anonymous sources, Apple will drop the traditional home button on the iPhone 8 in favor of a distinct touch-enabled area on the chin area of the handset, also corroborating Ming-Chi Kuo's claims of a "function area" below the new iPhone's main display. In addition, the paper reports that Apple will replace the Lightning connector with a USB-C port.

Over recent weeks, reports have clashed over which models will include several purported new features. For example, citing "reliable sources" within Apple's supply chain, Japanese blog Mac Otakara most recently claimed that only the OLED model will adopt glass casing and wireless charging capabilities, contradicting a Nikkei report and analyst Kuo's repeated claims that all 2017 iPhones will feature an all-glass design and wireless charging.

Further muddying the waters, Mac Otakara made no mention of the Lightning port being dropped, despite the fact that a USB-C connector would allow newer MacBook or MacBook Pro owners to connect the iPhone 8 to their laptop straight out of the box. On the contrary, Mac Otakara's sources claimed Apple's Lightning to USB-C Cable would remain an optional purchase, which just goes to highlight the odd situation that newer Mac owners could find themselves in, should the next iMac and Mac mini models also adopt exclusively USB-C ports, as they are expected to do so.

With an edge-to-edge design, the iPhone 8 is said to be similar in size to the 4.7-inch iPhone, but with a display the size of the 5.5-inch iPhone. According to Kuo, it will feature a 5.8-inch display with 5.15 inches of usable area, with the rest dedicated to virtual buttons that will replace the existing Home button. The iPhone 8's front-facing camera may also include 3D sensing capabilities, allowing it to find the location and depth of objects in front of it, perhaps enabling facial and iris recognition.


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Apple Testing More Than 10 Prototype iPhone Models, Including One With Curved OLED Display

iphone-7-front-backMultiple sources have claimed Apple will launch its first iPhone with a curved OLED display next year, and now The Wall Street Journal has thrown its weight behind those rumors.

The report claims an OLED version could be introduced as one of several new iPhone models unveiled next year, but it would have a higher price tag than current iPhone models.

OLED displays are thinner, lighter, and allow for flexible designs, but they are also up to $50 more expensive to produce than traditional LCD displays, according to analysts cited.

OLED displays can also be more energy efficient, as unlike LCD displays, they do not require a backlight to illuminate the screen. When displaying black pixels, OLED displays are completely off, which could preserve battery life.

Apple is said to have more than 10 different iPhone prototypes under development, so it may decide not to launch a version with an OLED display next year, according to the report. Previous reports said Apple will also launch new 4.7-inch and 5.5-inch models with traditional LCD displays next year.

Apple will likely tap Samsung as its primary OLED display supplier, but it wants LG Display, Japan Display, and Sharp to ramp up production for 2018, the report added, corroborating information heard previously. Sharp President and CEO Tai Jeng-wu confirmed Apple's plans to switch to OLED technology last month.


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