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Apple Pay at 7: Big Fish in a Small and Shrinking In-Store Mobile Wallet Pond

Apple Pay’s seven-year anniversary happens Oct. 20, but there is little to celebrate.

In some ways, the mobile wallet has come a long way. Apple Pay accounts for nearly half of all mobile wallet transactions in the United States, signaling a strong command over the U.S. mobile wallet market.

The trouble is that the market itself is rapidly shrinking. Only 4.5% of all consumers use Apple Pay to make in-store purchases — 26% fewer than last year. Meanwhile, consumers’ usage of contactless cards has continued to grow. The share of consumers making in-store purchases via contactless credit and debit cards has roughly doubled in the past year, in fact, with 14% and 7.7% of all in-store transactions now being made using contactless credit and debit cards, respectively.

These are just some of the findings that PYMNTS uncovered in Apple Pay @ 7 Report: Winning The Wallet Battle But Losing The In-Store War. We surveyed 3,671 U.S. consumers to learn why so many are opting out of using mobile wallets at the brick-and-mortar point of sale (POS) — and why many are using contactless cards instead.

PYMNTS research shows that Apple Pay continues to fall short of its market potential. The mobile wallet’s users spent a collective $91.7 billion in stores in 2021, but the total dollar value of all eligible Apple Pay transactions could be as high as $1.5 trillion. In other words, consumers only spend approximately 3.6% as much as they could using Apple Pay at the brick-and-mortar POS.

Consumers who do use Apple Pay and other digital wallets do so because they believe it is a convenient, easy and fast way to pay. Thirty-two percent of users cite convenience as a reason they use mobile wallets, for example, making convenience the foremost reason that consumers use them.

It is worth noting, however, that contactless card users are even more likely to cite convenience as their reason for using contactless cards. Forty-three percent of them do so. It is therefore clear that as convenient as users believe it is to pay with mobile wallets, they are far from the only convenient payment option at the brick-and-mortar POS.

This only scratches the surface of the complex story of how consumers’ in-store payment preferences have changed in the past year and what those changes mean for mobile wallets. Apple Pay @ 7: Winning The Wallet Battle But Losing The In-Store War provides an overview of how Apple Pay is measuring up to consumers’ rapidly shifting in-store purchasing demands.

To learn more about where Apple Pay stands on its seventh birthday, download the report.

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