Tracking Apple Pay after launch - overview

According to an overview from the specialised consulting and M&A advisory firm First Annapolis Consulting, Apple’s CEO Tim Cook reported that over 1 million cards were loaded within the first 72 hours. With this level of consumer interest, competitive pressure is building on both issuers and merchants.

The consulting firm adds in its overview, entitled “Tracking Apple Pay: October 28, 2014: Week 1 Overview,” some observations related to Apple Pay’s launch, namely the fact that Apple Pay is not limited to the named retail partners, as it works at any NFC-enabled merchant. Of the 220,000 acceptance locations touted by Apple, only around 30% are locations of named Apple Pay merchants. Moreover, most named Apple Pay merchants previously accepted NFC payments. Only a few partners, including Panera and the Disney Store, specifically added NFC support for the Apple Pay launch, the overview adds.

First Annapolis Consulting also points out that one impediment to broad merchant acceptance is the exclusivity policy of MCX, the coalition of leading merchants behind CurrentC. Thus, after initially accepting Apple Pay for several days, both CVS and Rite Aid reversed course and disabled all NFC contactless functionality on their POS terminals. The loss of CVS and Rite Aid is significant, removing over 12,000 locations from Apple Pay, the overview shows. Nevertheless, Meijer, an MCX member, was recently added to the list of official Apple Pay merchant partners.

Among the observations made in the overview, First Annapolis Consulting also adds that six of the largest US issuers have launched Apple Pay and another five have announced intentions to go live with the service in the coming months (Barclays, Navy Federal Credit Union, PNC, USAA and US Bank). Furthermore, Visa has recently published a list of over 400 soon-to-be-participating card issuers and Apple announced that more than 500 issuers overall have committed to the service.

The overview also indicates that those issuers who have announced participation, but have not yet launched have faced a mixed set of reactions from cardholders, many of whom took to Twitter and other social media to express frustration with the delay.

The consulting firm also argues that no specific dates for new launches have been announced and there were not observed the same type of direct communication (e.g., email campaigns) that the first issuers used prior to the launch. Moreover, there is also no indication about which party or parties decide the sequence of who launches next (e.g., Apple, Visa / MasterCard, etc.) and what the process is to launch.

Finally, the overview concludes that issuers clearly recognise the importance of getting cardholders to select their card as the default payment method (e.g., Wells Fargo is currently offering customers USD 20 to make a purchase with Apple Pay).