Blog: One Apple Pay User Takes a Bite

By Kate Fitzgerald, Emerging Payments Editor

Those of us immersed in payments may have a unique perspective on Apple Pay, but what about other folks? To get a read on one consumer’s Apple Pay POS experience, I checked in with my longtime companion and Apple Inc. enthusiast Marshall Craig of Scottsdale, Ariz. Marshall was part of the first wave of consumers with an iPhone 6. Like many self-described “Apple fan boys,” he was ready at midnight on Sept. 12 when online sales orders opened, and FedEx delivered his new phone on Fri., Sept. 19, as expected.

Coincidentally, Apple Pay partner Capital One is Marshall’s credit card issuer, so Apple Pay would be an easy connection for him. But Marshall wasn’t much interested in Apple Pay. A hardware aficionado who doesn’t love any type of shopping, his top reason for getting the new phone was its thinner, lighter design and improved Touch ID feature.  

On Oct. 20 Apple Pay went live, and five days later I persuaded him to try out the service so I could observe the phenomenon. Apple Pay supporter Walgreens was the most likely option for him, and he figured there was no harm in stocking up on toothpaste for the sake of experimentation.

Apple Pay worked smoothly (after a bit of confusion about entering his phone number into the PIN pad first, to ensure he’d get credit for his Walgreens Balance loyalty points). “About two people a day are using [Apple Pay],” remarked the Walgreens checkout clerk.

20 Retail Corporations=34 Store Brands

Few of the 34 store brands Apple lists as Apple Pay supporters are regular destinations for Marshall. Actually, a close examination of the list of participating retailers reveals that multiple store brands on the list are owned by a single company. For example, Foot Locker Retail Inc. owns six additional brands, each listed as Apple Pay supporting stores. Several other parent companies account for two or more stores on the list (Chevron is the parent company of Texaco and Extra Mile stores, each listed separately). Subtracting for companies with multiple store brands, only 20 different corporations currently are participating in Apple Pay (not including Apple’s own stores). Five new corporate partners will join later this year, Apple promises on its Website.

When Apple initially said its NFC-based payment service technology was accepted at 220,000 U.S. stores, that number included retailers that coincidentally supported NFC payments (and therefore would accept Apple Pay plus other NFC payment methods, including Google Wallet and Softcard). Now some of those retailers no longer are supporting NFC; among those opting out of NFC are Rite Aid and CVS.

But it’s early days for NFC, and for Apple Pay. Apple sold a record 10 million iPhone 6 and 6 Plus smartphones the first weekend the new device was available, contributing to Apple’s record $8.5 billion net profit for the quarter ended Sept. 27, Apple announced last week. Merchants are still weighing their options for adding Apple Pay, and for each it’s a proprietary business decision.

When Staples comes on board with Apple Pay later this year, as planned, Marshall surely will go there to buy office supplies with his Capital One business card. He will happily use Apple Pay at the Apple Store. And when he next runs out of toothpaste, he’ll use Apple Pay at Walgreens. Merchants interested in him will be interested in Apple Pay, and time will tell how much that’s worth.

Kate Fitzgerald covers emerging payments at Paybefore. She can be reached at [email protected].