Apple Pay has the ability to significantly transform the mobile payment space says ITG Research, on the release of figures which show that iPhone users were responsible for one percent of digital payment dollars spent in the month of November.
The ITG Mobile Payments report, which uses data from the firm's proprietary consumer panel, found that Apple Pay customers used the service roughly 1.4 times per week, with a return rate of 66% for future transactions at the same merchant.
This is a strong showing, contends ITG, considering that the service is only available to Apple customers with the newest hardware and it is currently supported by a relatively limited list of merchants. In comparison, Google Wallet, which launched in 2011, accounted for only four percent of digital payment dollars in the same month.
Apple Pay could pose a major threat to market leader PayPal's current dominance in mobile payments, according to Steve Weinstein, senior internet analyst at ITG Investment Research. Citing PayPal's significant infrastructure barriers - a challenging relationship with payment counterparties and the lack of biometric capability - Weinstein believes that it will be difficult for PayPal to match the ease of use and consumer appeal of the Apple solution.
Indeed, 60% of new Apple Pay customers used the application on multiple days through November, suggesting strong customer engagement. In comparison, New PayPal customers used its service on multiple days during the same time period just 20% of the time.
Earlier this week, Apple claimed that banks representing up to 90% of credit purchase volume in the US are now signed up to Apple Pay and that momentum with retailers continues to build.