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Apple Pay survey finds many retailers still resistant over data control & costs

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Apple has invested a lot into its Apple Pay mobile payments solution since its launch last fall. Since launching in October, the payment method is already accepted at more than 700,000 retail locations, according to the company. Reuters today has published a new report in which Apple says that Apple Pay will be accepted by half of the top 100 merchants in the United States by the end of this year, with more planned in 2016. Currently, a fourth of the top 100 retailers support Apple Pay.

According to a retailer that Reuters contacted, Apple has been pushing its mobile payment service aggressively to retailers. The retailer, which remained anonymous and has no plans to accept Apple Pay, said this:

“They have been pushing hard and it’s been that way for months. They have called and tried to persuade us even after we communicated our decision to them.”

That same retailer has no plans to accept Apple Pay because not even a “small percentage” of its customers have requested it. Nevertheless, the research found that retailers accepting Apple Pay are generally happy with the service, and its customers are too…

For instance, Whole Foods stated that its shoppers are enjoying the “speed, convenience, and security” of Apple Pay. Whole Foods also noted that 2 percent of its sales as of March were accounted for by Apple Pay.

Walmart, which has commented before on why it doesn’t accept Apple Pay, reiterated its previous stance. A senior executive for the company said that the biggest problem Walmart has with Apple Pay is the lack of data control. Companies don’t get the same level of information with Apple Pay as they do when a user swipes a credit card. Walmart, however, is a supporter of CurrentC, although recently we’ve seen other supporters of CurrentC, such as Best Buy, come out and announce Apple Pay support.

Another problem retailers have with Apple Pay is the cost of upgrading their already in-place terminals.

“What is the return on investment?” asked Maureen Elworthy, director of treasury at Ahold USA, which runs supermarket chains like Stop&Shop, during a panel discussing Apple Pay at an industry conference. “The [return] is negative,” she said.

She told Reuters that Ahold USA does not plan to accept any wallets because they see it as an investment cost without immediate returns.

Apple, of course, downplays the cost of accepting Apple Pay with one of its payment partners adding that “as long as the retailer is upgrading to the new payment terminals, which are enabled with contactless payment technology, there is very little additional cost to accept Apple Pay.”

Earlier this year, Tim Cook stated that Apple Pay accounted for $2 out of every $3 spent with contactless payment. Apple has previously stated that the launch of Apple Pay was “overwhelmingly positive and enthusiastic.”

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Comments

  1. mobileseeks - 9 years ago

    Dear CIOs,
    Here is the ROI: When I go to a drugstore I go to Walgreens over CVS even though they are roughly equal distance from my apartment. Why? Because one has ApplePay and one doesn’t.

    • Jonathan Smyth - 9 years ago

      While I understand your sentiment, your decision is statistically insignificant. There are just not enough people that committed to mobile payments to really matter.

      • rdemsick - 9 years ago

        That will change. Why not get ahead of the bus before it rolls you over, or do you still rent your videos from blockbuster? Habit changes slowly but convenience will win eventually, and those who got the message too late will suffer.

      • That’s not true. I choose Walgreens for the same reason.

      • chrisl84 - 9 years ago

        @Brandon if you are on 9to5 you arent an average customer. The average CVS/Walgreens customer is likely over 60 years old. And they arent using iPhones or Apple Watches

      • myke2241 - 9 years ago

        There is aways a gamble in regards to making any such changes. The thing you need to consider is your not taking away a option, your adding one. that only goes to attract more people. you don’t want to wait too long because people see that as a inability to adapt and have already chose to go else where. its tough to win back what you have lost.

      • Robert Dupuy - 9 years ago

        Jonathan Smyth, I think his story is meant to be anecdotal, one anecdotal reference is indeed not statistically significant, even when there is statistically significant data available.

        I think he has a good point, this is happening, and the trend is only heading in one direction.

        I have an iPhone 6 Plus and not yet set up Apple Pay. But I will, I would stay on the look out for critical mass.

        Of course some retailers want to stay behind the curve – and that’s fine, its a strategy.

      • Jonathan Smyth - 9 years ago

        Robert Dupuy, thanks for your well thought out response. (It is a rarity in this forum).

        I do use Apple Pay anytime I can, and it is great. But it is certainly not the only criteria for choosing a retailer. I understand that businesses cannot immediately jump onto every new idea, including Apple Pay, and I do not hold that against them. There are budget considerations and training issues that take time in large businesses. I am not going to change from a business I like simply because they are not the first to jump onto the Apple Pay bandwagon. As time goes by and more terminals are replaced (based on business timelines that may have been established even before the announcement of Apple Pay,) the more we will all be able to use mobile payments.

      • “Statiscally insignificant” implies that statistics data exists suggesting that availability of Apple Pay will not in meaningful numbers where a purchaser will buy. But really I think you’re just blowing it out your ass.

      • PMZanetti - 9 years ago

        False.

      • kplayaja - 9 years ago

        I actually just switched to Walgreens because of Apple Pay. The convenience is real when you just want to get in and get out. They also have a sweet rewards app that pops up in Passbook.

    • Your point would be fantastic if Apple Pay was available on every phone, every banking institution and in very retail store in the country. But it’s not.

      It’s available on the iPhone 6/6+ only, on the 5 or 5S if you drop another $250 minimum on an unavailable Apple Watch. A relatively small number of banking institutions let you use it and it can be used in a paltry number of retail stores. That’s not garbage, it’s fact. Whether you like it or not making a statement that you go shopping at Walgreens because they have Apple Pay is hardly likely to get CVS quaking in their boots when the vast majority of their customers wouldn’t even be able to use Apple Pay anyway.

      Bearing in mind that the vast majority of people won’t be able to use Apple Pay, why would a retailer invest time, money and their own resources into technology which gives Apple a cut of their profits and why would banks do the same? Apple Pay has been available 9 months and has barely a foothold in a country in which you would think retailers/banks/folk would be clamouring for extra security in the absence of chip & pin and it’s ilk.

      Now take into account the many banking institutions and retailers around the world, many of which already have extra security like chip & pin already available, and you will see the that Apple have a completely insurmountable challenge to make Apple Pay a success.

      If it ever is a success it is years off.

      • Rio (@Crzy_rio) - 9 years ago

        Apple Pay is only in its first year, as time passes you will have more compatible phones, banking institution and more people that want to use it.

        If it is a success, it will be the early adopters that benefit the most from it and other big orginizations that will continue to receive bad pr for not adopting it.

        If it is not a success, the $ lost from your early investment as a retailer is actually very little.

        Retailers do not lose a single $ from this, they only loose control of some of the data they would otherwise acquire from the credit cards. Considering that Apple Pay is only available on 2 models, select banks and select retailers it is making more than just a foothold.

      • Robert Dupuy - 9 years ago

        Some companies do want to stay behind the curve, I’ve worked at some.

        It’s a strategy, it keeps you from investing in the wrong tech. On the other hand such companies never get a wedge issue where they can drive a few customers from the competition to theirs…like this will be for wal-greens.

        I don’t know who the retailer in the story might be, but lets pretend it is CVS. No biggy really – I’ll just shop at walgreens. I’m not concerned if some retailers don’t adopt it, only enough have to adopt it.

        In fact there is really only one retailer that I wish would adopt it, but is big enough to snub it without worry- wal-mart.

        I think in that case, Wal-mart and Apple should sit down and figure out how to cut visa and mastercard out of the equation. :) I’m sure its not all that easy, but anyway….looking forward to apple pay :)

      • iSRS - 9 years ago

        As a big supporter of ApplePay, even I was with you all the way until this point:

        “why would a retailer invest time, money and their own resources into technology which gives Apple a cut of their profits and why would banks do the same?”

        Apple takes exactly zero percent from the retailers. They pay nothing. The banks provide Apple a percentage of what they are already taking from the retailers? Why? They are satisfied that the cost of paying Apple reduces the cost of fraud and increased security.

      • some1random1guy - 9 years ago

        Your comment would make more sense if the retailer had to invest time, money and their own resources to accept Apple pay, but the opposite is true. They need to waste those resources turning it off!

      • Some good replies – and it makes a refreshing change not being berated for making a couple of errors – thanks guys :)

      • A.p. Moulton - 9 years ago

        If you knew anything about retail or Walgreens or CVS, you would know that the latter is already shaking in it’s BOOTS.

    • Nathan Roth - 9 years ago

      I too will go slightly out of my way to use a retailer that accepts Apple Pay vs one that doesn’t.

  2. iSRS - 9 years ago

    I can completely understand if they don’t yet have the technology to support it. I get it. And that will come, eventually.

    The ones that do and shut it off are what get me. Why spend the money only to keep doing what you’ve been doing?

    Walmart should keep in mind Sears, Bradlees, Kmart and Caldor. The companies they hurt (Sears) or put out of business (the others) because Walmart better predicted the future, and the others were slow to adapt.

  3. calisurfboy - 9 years ago

    I’d be more enthusiastic about Apple Pay if my iPhone 5s supported it but it doesn’t. When I upgrade in a year or two I WILL be shopping at locations that accept it because I am tired of getting a letter every other month stating (fill in black business) lost my data and I need to change all my passwords, request new credit cards, and monitor my credit. One more step towards personal security and I am happy.

  4. myke2241 - 9 years ago

    ” investment cost without immediate returns” that is a statement of fools! what investments give you “immediate returns”… few to none. comment negates the acceptance of CC payments way back which i am sure were fought just as card.

  5. lincolnsills - 9 years ago

    Anyone else notice the merchants that cater to low income are the ones not interested in any payment service that is designed with the consumer in mind. Merchants of substance like Whole Foods or Trader Joes remind me why I give them my money.

    • Listen – Apple Pay isn’t designed with the consumer in mind – it is designed so that Apple can take a percentage of your money, and in order to do that retailers make less profit from your purchase.

      And you wonder why retailers aren’t interested?

      • Jonathan Smyth - 9 years ago

        That’s not true. The banks are paying Apple’s percentage. The retailer does not pay any extra fees. However, they do have the cost upgrading to NFC terminals.

      • Edison Wrzosek - 9 years ago

        Yeah, keep spreading that stupid FUD… Maybe learn something about PAY before saying such nonsense.

      • iSRS - 9 years ago

        @AuntyTroll – I can never tell if you believe some of the FUD you post. You can’t possibly be that ignorant on these issues, can you? You are trolling for sport, right? So facts don’t matter, as long as you make someone’s blood boil?

      • Dan McQuade - 9 years ago

        Couldn’t agree more!

      • some1random1guy - 9 years ago

        You couldn’t be more wrong. Apple Pay saves both banks and consumers money by virtually eliminating fraud.

  6. chrisl84 - 9 years ago

    I request it all the time….and get looked at like I’m asking to pay with fake money. Apple has done poorly at informing businesses of mobile payments. They assume the local manager at XYZ Foods is a tech head and knows about smart phones. They most certainly ARE NOT and have no clue what Apple Pay is.

    • oneloveonebeing - 9 years ago

      i think its because they haven’t been notified of it because that retailer hasn’t started using it yet, once they do a memo will go out, and they should know at that point

    • Joe Cheng - 9 years ago

      Using Apple Pay is definitely a ymmv situation at this point. my biggest gripe is the fact that lots of places that take Apple Pay still require me to sign after the transaction was approved, which kind of defeats the whole convenience factor. TouchID has already authenticated my ID better than a scribble of a signature ever will.

      With Android Pay launching, within a couple of years, the vast majority of smartphone users will have the ability to pay with their phones and its a matter of time before it reaches mass market penetration and merchants need to adapt. Hopefully sooner rather than later but its where this is going.

  7. iRoswell - 9 years ago

    I have the 6, and would love to use Apple Pay more often, if more locations accepted it.

    These companies really need to start updating their systems anyway. I’m really tired of having to change cards every time one of the big retailers contact the banks over a breach in security. But they don’t care about that; they only care about losing my data.

  8. Edison Wrzosek - 9 years ago

    I love this statement: “She told Reuters that Ahold USA does not plan to accept any wallets because they see it as an investment cost without immediate returns.”

    This exemplifies short-sighted, cheap-ass stupidity!

    • Cyclonus5150 - 9 years ago

      Ok so the sources cited here – Walmart, who’s petulance towards Apple Pay is well documented and Stop & Shop, a bottom feeder gas station convenience store. Meanwhile, the lists of merchants likely to serve an Apple customer continues to grow at a good clip. Where’s the story here and what the motivation?

      • iSRS - 9 years ago

        Actually, Stop & Shop is originally a Boston area grocery store, perhaps more upper/middle range. Not a bottom feeder.

        But your point still stands with Walmart.

    • Odys (@twittester10) - 9 years ago

      No kidding ! This statement exemplifies the corporate attitude towards customers. This is why so many attempts to get rid of credit cards failed, but I am sure Apple won’t allow this to happen with Apple Pay.

    • wvb22 - 9 years ago

      It’s only short sighted when you look through your Apple glasses. It is true that there is no great reason to adopt Apple Pay for most merchants. Why? Because they’ll have to invest in something that not many consumers use or want at the moment. Not me, I love it. You love it too but we’re not the average customer. Fact is that almost nobody knows about this thing unless you’re really followed tech news or have a special interest in Apple. For the merchant there is no good reason to adopt Apple Pay. They get even less insight in their customer buying behavior then with a credit card. Great for the customer but not if you want to boost your business. They are graving for this kind of information and Apple won’t provide it. So businesses will rather adopt a solution of their own. Which works with every NFC phone and not just an iPhone. It’s just business. Until enough people demand Apple Pay and show it with their wallet Apple Pay won’t be very successful. Me and you and all guys raving at Apple fan sites are not the critical mass large businesses are looking for.

      • Edison Wrzosek - 9 years ago

        So you are condoning retailer data mining of our data, WITHOUT our consent? Nice… I remember a quote from the Jobs movie: “How can someone want something, if they’ve never even seen it?” This holds true for this situation… If the consumer doesn’t know something exists that will make their lives better in many ways, including security, how can they even request it? If these numb nuts CEO’s of retailers don’t even TRY to offer a service, the consumer will take decades to catch on! Your view is completely ass backwards…

      • some1random1guy - 9 years ago

        “Because they’ll have to invest in something that not many consumers use or want at the moment.”
        WRONG!
        The systems that everyone needs to have by fall have NFC capabilities. Many companies, both large and small, already have them. The only time a company has to spend money with regard to Apple Pay is if they want to turn it off!

      • wvb22 - 9 years ago

        @Edison Wrzosek: I don’t condone any data mining. I just present the facts as is. Yes companies data mine your purchases all the time. It’s valuable data that companies pay loads of money to get insight in your buying behavior. Do I like it? No, just as you don’t like it. Apple Pay doesn’t share this data with companies. Guess what: that’s why they have big reservations with Apple Pay. They rather invest in some other wireless payment solution so they can keep mining your data. Again, do I like it? No. Do I understand why Apple Pay has a hard time finding support with retailers? Yes. That’s why I said: it’s just business stupid!

  9. Bert van Horck - 9 years ago

    It may be slow but I feel reasonably confident this will succeed. It will return to the consumer the anonymus wallet, but this time in the modern age. People will understand it in due course, this is about stamina.

  10. donnybeattie - 9 years ago

    If it is more secure as I’m lead to believe, then that’s what I want to use. I took my kids to Subway a few weeks ago, something I’ve never done before, just so I could make my first payment with Apple Pay. It was quicker than a credit card swipe and the 50 yes/no questions that now go along with a swipe. I then did the same thing with Panera. In that case it was no quicker than a credit card swipe because I was asked to sign a slip to complete the transaction. There was nothing identifying on the slip I signed so I still felt that it was more secure than my information being stored on Panera’s network. So I disagree with the “no net gain”. I went to two places I’d never considered going before primarily for the “excitement” of trying something new that also might be more secure.

  11. Felix Machaca - 9 years ago

    Follow the money, the things against apple pay are twofold from the merchant perspective,
    A, upgraded terminals, yes they are upgrading for EMV chip but they are not required for mobile payments.
    B. strong desire to get credit cards out of the purchase path, CurrentC will be arguably their best and arguably the only shot the consortium has of eliminating or creating a competitor able to break the credit card consortium.

    1-2% point per transaction may not be a big deal to many consumers but to merchants its a huge deal and it has been getting worse as cash is being utilized less and less.

    There are lots of other issues, personally I’m sad no one talks about chip and PIN vs chip and signature, but suffice it to say credit card companies have little respect for the intellect of the average American consumer. I say American as Visa and the rest have no problems with someone outside the US remembering a pin but as an American they feel it would be too much of an issue for us to remember a pin and also we are supposedly very attached to signatures. Is there any wonder more merchants hate them with a HUGE passion?

    • some1random1guy - 9 years ago

      I guess you mean follow the lies. That fee is to banks, and it’s lower than their cost of the fraudulent transactions it eliminates.

    • some1random1guy - 9 years ago

      By the way, CurrentC is DOA. Putting the user last is suicidal. People just won’t jump through the hoops it requires.

  12. Gregory Wright - 9 years ago

    Well, the debit card isn’t going anywhere anytime soon. With that in mind, I will continue to do what i have always done. Use my debit card where Apple Pay is not accepted. I look at this way. I carry my iPhone in my left rear pocket. I sometimes carry my debit card in my front right pocket, sometimes in my wallet right rear pocket. For me, I have to reach into a pocket for both. My purchases are withdrawn from the same account. What does it matter which I use. I use Apple products because I like them not because I want to enrich Apple.

  13. proudinfidelusmc - 9 years ago

    I would somewhat understand retailers not wanting to spend money on upgrading their POS’, BUT, new banking policies are requiring retailers to upgrade their machines that accept chip and pin payments (i.e. NFC) or they, not the banks, will be liable for any and all fraud done at their locations. That means they will be required to have the machines that will accept Apple Pay and all other form of NFC payments. Retailers don’t have to pay extra fees to Apple in order to use Apple Pay. Apple takes their cut from the Banks, not the retailers. They already accept credit cards. It’s all BS to stop any and all forms of NFC payments so they can TRY to launch their stupid CurrentC system which is a fail already.

    • Odys (@twittester10) - 9 years ago

      Yes, but as you can see big box retailers are finally starting to give in – Best Buy, Home Depot – more and more people will be asking about Apple Pay, and now with Android Pay (I know its ridiculous rip-off) the critical mass of devices with mobile payments will push more retailers to accept them. Its a matter of time !

  14. Howie Isaacks - 9 years ago

    I say piss on these retailers who don’t want to allow Apple Pay. If we all stop going to these places, they’ll get the message. Walmart in particular can kiss my ass. They should be happy that I’m shopping there rather than try and take the opportunity to perform data mining. As it is, I go there a lot less anyway. Apple Pay, and other payment systems like it are the future. If these retailers want to stay stuck in the past, they deserve to get less business as a result.

  15. Odys (@twittester10) - 9 years ago

    “She told Reuters that Ahold USA does not plan to accept any wallets because they see it as an investment cost without immediate returns.” – haha – I would love to read what executives were saying back in the day when credit cards were first introduced.

  16. Here’s what I don’t get about CurrentC…What’s it going to run on? The sun will explode before Apple allows it on iOS. And with Google releasing Android Pay, they are sure to make that the most convenient option with OS-level integration. When you place your mobile next to a contect-less card terminal, there is only one payment app that can pop up on your screen. Expecting customers to deliberately open another app just to pay would be unrealisitc. So, what gives?

  17. Insideman - 9 years ago

    Witnessed my GF pay for her McDonald’s meal with her APPLE WATCH. People were actually CRANING THEIR NECKS to watch her do it… Then cashier started clapping! Best thing of all? Because Apple Pay DOESN’T mine for data, we didn’t have to worry about all the lookers trying to steal her credit information. ;)

  18. Don Wise (@doncwise) - 9 years ago

    How naive for a retailer to think that their customers don’t want Apple Pay, simply because a small percentage has asked for it and not a majority. It’s one of the reasons I switched from CVS to Walgreens.

  19. A.p. Moulton - 9 years ago

    An even smaller percentage of your customers truly believe that a suggestion to your sales staff would ever even make it to a decision maker at the company. THAT is your problem.

  20. gigglybeast - 9 years ago

    You still can’t use Apple Pay in the online Apple Store, in the App Stores, or in iTunes. Seems hypocritical on Apple’s part.

  21. galley99 - 9 years ago

    I am spending 2-3x as much in the vending machines at work since they have begun accepting Apple Pay.

  22. Ryan Varju - 9 years ago

    As a consumer, I’ve found myself now going to Walgreens because of Apple Pay. As a person that generally doesn’t carry cash, I now purposely look for places that offer this service. While it may not be for everyone, it has changed the way I purchase items and where I buy them.

  23. I’m really excited for Apple Pay to come to Canada. There won’t be a single retailer that doesn’t accept it. *Besides Walmart actively blocking it

    We’ve had NFC in our Debit and Credit cards for years now. We also completed a Chip and Pin Card upgrade which ended on January 1st 2015. The upgrade was industry wide and brought to retailers by banks and card processing companies. Since NFC cards had been around for a long time by the time retailers got around to adding the Chip and Pin machines, they added NFC at the same time. As Apple says it’s a small cost when already upgrading machines.

    I hope it launches this summer, rather than the late fall I’ve seen reported.

Author

Avatar for Chance Miller Chance Miller

Chance is an editor for the entire 9to5 network and covers the latest Apple news for 9to5Mac.

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