Apple Pay — the iPhone-based digital wallet that enables consumers to tap and pay at the in-store point of sale or complete online purchases within their mobile devices — was introduced 10 years ago. With growing adoption for in-store purchases by mobile-centric millennials and high-income consumers, its retail sales numbers have grown significantly. The total sales made through Apple Pay in 2024 are 45 times its first year when adjusted for inflation.
Apple Pay remains the most used mobile wallet payment service for in-store transactions. It is second-most used for online purchases, after PayPal.
However, though more than half of Apple Pay’s overall in-store retail growth can be attributed to increased adoption by merchants, less than 20% can be attributed to consumer adoption. And with merchant adoption at a peak, Walmart notwithstanding, future growth relies primarily on consumer adoption.
Apple Pay’s growth in the last year was largely limited to online sales. We find that in-store sales have slowed. Contactless cards remain its most formidable competitor at the point of sale, at least for now. Allowing access to the NFC chip could open the door for a stronger in-store mobile wallet challenger, PayPal.
These are just some of the findings explored in “Apple Pay @10: How Competitive Challenges Could Slow Retail Sales Growth,” a PYMNTS Intelligence exclusive report. This edition draws on insights from a survey of 2,241 U.S. consumers conducted between Aug. 20 and Aug. 28. The survey sought to better understand long-term trends influencing consumers’ adoption of mobile wallets at the physical point of sale and online — particularly Apple Pay, on the tenth anniversary of its launch.
Apple Pay Sales Show Continued Growth, But Can It Last?
Estimated total Apple Pay sales rose to $268B in August 2024, up from $213B last year.
Apple Pay usage has grown significantly since its launch. After its first year of operation, just $4.49 billion in estimated in-store sales were made via Apple Pay. Current financial data shows that the total in-store sales made via Apple Pay is 45 times that amount, accounting for inflation. As of August 2024, the estimated total Apple Pay in-store sales now sits at $268 billion, up from $213 billion last year.
Estimated sales data shows that for eligible in-store transactions, Apple Pay is now used more often. Our analysis finds that in 2015, shoppers used Apple Pay for 5.1% of eligible in-store transactions, and that has risen roughly 75% to reach 8.9% in 2024.
Zooming in on current usage, data shows that 9.4% of consumers used Apple Pay for in-store purchases in the last seven days. Online, 6.9% used it for purchases. For in-store transactions, Apple Pay was the most used mobile wallet payment service, while for online purchases, it was the second-most used after PayPal.
The most accurate analysis of this data cannot ignore inflation. Growth slows when taking this key variable into consideration. It can be assumed that without inflation patterns following the COVID-19 pandemic, Apple Pay would have around 25% less in sales volume — a drop of up to $66 billion. When considering inflation, the estimated value of Apple Pay in-store retail sales for this year equals $202 billion in 2015 U.S. dollars. This still represents growth of 45 times what these sales were originally. That makes 17% of the increase in estimated Apple Pay sales due to real growth in consumer usage.
The remaining 58% growth is linked to another key event of the past decade — the pandemic. Contactless payment technology use grew very quickly during that time, with increased merchant acceptance supporting Apple Pay’s growth as well as the increase in contactless card use at the point of sale. At this point, merchant acceptance is unlikely to grow further, suggesting additional growth will mostly be limited to consumer adoption.
Apple Pay Starts to Feel the Heat From Competitors
Apple Pay’s growth in the last year was largely limited to online sales, while in-store sales plateaued.
Our data shows that Apple Pay is currently used most in-store among competitors. However, its lack of in-store growth allows other providers to narrow this gap. In 2021, Apple Pay accounted for 8.9% of in-store sales. It is now at 9.4%, indicating that growth of in-store usage has slowed if not completely stagnated. Meanwhile, PayPal has started to gain in-store utilization significantly, with 8.0% of consumers using PayPal in-store in the last week, up from 6.1% in 2023.
Apple Pay grew its online share from 6.6% to 6.9% of consumers in the last year. Yet, PayPal has surpassed this growth to expand its lead in online purchases, growing from 6.8% to 7.9% of consumers using this method. These findings suggest that digital wallet usage in-store and online is on the rise, yet consumers increasingly turn to options other than Apple Pay, thus slowing its adoption.
Despite Options, Debit Cards Remain Apple Pay Standard
Debit cards are the underlying payment method for roughly half of Apple Pay transactions.
Even as consumers continue to diversify, debit cards remain the predominant underlying payment method for nearly all mobile wallets. There are exceptions, however. For instance, Amazon Pay users are most likely to register and use credit cards for online sales.
Paying with account balances is popular for some wallets known for peer-to-peer capabilities. For PayPal users, their PayPal balance is the most used underlying payment method for both online and in-store purchases. Similarly, Cash App balances were the most used underlying payment method for in-store purchases that used Cash App.
Debit cards were used for 58% of in-store transactions using the Apple Pay wallet specifically. While 23% of in-store transactions used credit, 15% used Apple Cash, 2.9% used bank transfer and 1.3% were paid via Apple Pay Later, which was shuttered this year. Online, 35% of Apple Pay’s transactions used debit cards. Apple Cash played a bigger role in online sales, accounting for 24% of Apple Wallet transactions, edging out credit cards, which accounted for 23%.
Bank transfers and Apple Pay Later also took a share from debit cards in online transactions, with 4.6% of consumers using bank transfers and 14% using Apple Pay Later as the underlying payment method for online Apple Pay purchases. These findings highlight consumers’ growing interest in less traditional payment methods such as underlying digital wallet balances, an area where PayPal and Cash App now dominate.
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Methodology
“Apple Pay @10: How Competitive Challenges Could Slow Retail Sales Growth,” a PYMNTS Intelligence exclusive report, is based on a survey of 2,241 consumers conducted from Aug. 20 to Aug. 28. The sample was balanced to match the U.S. adult population in key demographic variables. Respondents were 52% female, with an average age of 48. Additionally, 41% annually earned more than $100,000.
1. [Retail and food services census data. Census.gov. https://www.census.gov/retail/marts/www/adv44X72.txt. Accessed October 2024.]
