Apple Pay: FUD vs. the future

Apple Pay: FUD vs. the future

Apple Watch and Apple Pay (Image credit: iMore)

For the past few days I've been using Apple Pay on my Apple Watch to make pretty much all my purchases. We've had ubiquitous tap-to-pay in Canada for so long I can't remember the last time I had to swipe or sign. As of a week ago, though, all of our major banks finally went fully onboard with Apple Pay as well. So, now I can use it pretty much anywhere and everywhere.

My experience with it so far has been delightful. Quick, secure, and delightfully convenient. That's in stark contrast to some of the more fud-dy-duddy accounts some media outlets have been promoting. So, what's really going on?

Apple Pay in action

I've tapped my Apple Watch to pay for coffee and clothing, food and flowers, toys and tech products, groceries and gas, and the list goes on. As long as the store takes Visa or Master Card, American Express, or debit, and the contactless payment terminal is online and operational, I've been Apple Paying.

And the reaction has been terrific. There's no magic to tap-to-pay itself anymore — we've had it here far too long for that — but there's still a considerable WOW factor at work when tapping to pay with an iPhone, and especially with an Apple Watch.

"That's amazing!" "That's so cool!" "I've got to get that!" are the typical reactions I've been getting. It's a fun feeling, of course, but now that all the major banks are online here, I don't expect it to last. I expect it to spread far and fast enough it becomes almost as normal as tapping plastic cards in a few years.

My friends set it up and started using it immediately as well. They'd all had to go through the hassle of fighting charges and changing card numbers due to data breaches in the past. So, the security and privacy features of Apple Pay — it never passes your actual card number, doesn't provide any transaction details, and is useless if not connected to the pulse on your wrist or authorized by the print on your finger — were hugely appealing.

That Apple Pay immediately offered to set up the credit card already authorized for iTunes made it all the more easy. (Additional cards, for the most part, get authorized via the bank's iOS app.)

I helped my mother set hers up this past weekend as well. She'd left home without her purse and been unable to buy something she needed, even though she'd had both her iPhone and Apple Watch with her at the time. She found it incredibly stressful. Now she's no longer worried.

Even though it's early days, Apple Pay has already become one of the most compelling services on the market. And it's still growing.

Give me numbers

Anecdotes are one thing. They apply to my use case in my area. So, beyond the subjective, how's Apple Pay doing, objectively?

Since it was released in October of 2014, Apple Pay has spread across the United States and into the United Kingdom, Canada, Australia, Singapore, and China.

In the U.S. alone, Apple Pay is accepted at over two and a half million locations, and globally, at over ten million contactless payment locations. It's not just growing either; it's accelerating. The end of last year saw ten times the growth as the beginning. That translates into double-digit growth each and every month.

It's not just at retail either. In-app, payment volumes doubled in the second half of 2015, with developers seeing a proportionate increase in checkout rates.

American Express has been pushing Apple Pay internationally. Starbucks is rolling it out across 7,500 company-owned stores in the U.S. Exxon and Mobile is integrating it into Speedpass+. All major Canadian banks now support Apple Pay for Visa, Mastercard, and the unified Interac debit-card system.

And that's only the information that's been made public.

FUDed up

The biggest challenge facing Apple Pay today is simple FUD. Fear, uncertainty, and doubt has long been the negotiation and deflection tactic of choice for companies less-than eager to embrace better and more modern technologies, especially when those technologies benefit customers.

Last year it was claims of "Apple Pay fraud" when Apple Pay has been the only secure part of the banks historically poor fraud-prevention system. This year it's "technical hitches", once again ascribed to Apple Pay, but only present in the systems controlled completely by the banks.

"Bendigo Bank [in Australia] is experiencing some unforeseen technical issues in accepting Apple Pay payments at selected merchant terminals," a spokeswoman for the bank told Reuters, adding that a lack of wider industry engagement in launching the service limited the lead time in testing the new technology.

What Reuters utterly fails to report is that Bendigo Bank apparently couldn't or wouldn't support tap-to-pay for American Express, the primary Apple Pay mechanism in the country. So, people trying to tap American Express cards via Apple Pay couldn't get it to work. But that's the bank's choice, not any "technical" issue with Apple Pay.

The gas stations near me have chosen to support Visa and MasterCard for tap-to-pay, but not debit. So, I can't use my debit card there, not with Apple Pay and not with the actual plastic card. And that also the gas station's choice, not a "technical" issue with Apple Pay.

In Australia, where more than 60 percent of all card transactions are through contactless cards, reception has also been muted. A spokesman for one large retailer said he had seen "very little uptake of the payment option" in his sector. He didn't want to be named as he was not authorized to speak publicly about the matter.

Australia's banks are where Canada's banks were a few months ago. One has already seen value in adopting Apple Pay and others will eventually follow suit. That's how technology works.

Once that happens, growth will follow. Then, at some point in the future, the same "financial analysts" and "media outlets" will claim Apple Pay has so much adoption the path the further growth is unclear. Sensationalism seldom cares about consistency, after all.

Three months after the China launch, users on online forums complained that using Apple Pay, even at popular fast-food outlets, was not as seamless as local services such as WeChat, Tencent's messaging and mobile commerce phenomenon.

Again, there's no difference between using Apple Pay and using an NFC-equipped credit or debit card. The terminals register them in exactly the same way. The signal, as they say, is the signal.

I've encountered tap-to-pay terminals that have been dropped and broken by the staff or previous customers that wouldn't work with Apple Pay anymore — or my cards. That also has nothing to do with Apple Pay. Blame physics. And humans.

As contactless payment terminals become better and more consistent, so will Apple Pay. That's one of the biggest benefits of the system — it works with existing credit and debit tap-to-pay.

As the world continues to go contactless, the potential for Apple Pay only grows.

In the meantime, the problem with FUD, and reckless reporting, is that it makes people afraid of technology, especially those who would otherwise benefit from it the most. That includes those with accessibility needs for whom Apple Pay is an incredibly enabling feature, and those who are tired of being victimized by traditional fraud and privacy violations.

Shame on them.

The Apple Pay off

Apple Pay

Apple Pay (Image credit: iMore)

Friday was National Donut Day. I drove through Tim Horton's — Canada's Dunkin' Donuts — and picked up a dozen mixed for a party. When I got to the window, the gentleman extended the standard terminal towards me, I tapped my Apple Watch, we both heard the ping, his eyes lit up, he exclaimed how awesome it was, and passed me my box.

A few months to a year from now, I no longer expect that reaction. Not at the drive through, not at the cash register, not anywhere around here.

When I visit the U.S. and tap-to-pay at Square terminals in coffee shops, it's already that way. The magic becomes the everyday. That's the story of technology, and it'll be the story of Apple Pay.

Soon we'll be enjoying faster, more convenient, more private, and more secure transactions, and we won't even give it a second thought.

Rene Ritchie

Rene Ritchie is one of the most respected Apple analysts in the business, reaching a combined audience of over 40 million readers a month. His YouTube channel, Vector, has over 90 thousand subscribers and 14 million views and his podcasts, including Debug, have been downloaded over 20 million times. He also regularly co-hosts MacBreak Weekly for the TWiT network and co-hosted CES Live! and Talk Mobile. Based in Montreal, Rene is a former director of product marketing, web developer, and graphic designer. He's authored several books and appeared on numerous television and radio segments to discuss Apple and the technology industry. When not working, he likes to cook, grapple, and spend time with his friends and family.

  • You're lucky you already have contactless everywhere. Since we've never had contactless cards in the US (as far as I know), NFC isn't as widespread. Thankfully, that chip switch will fix that in the process.
  • We've had contactless cards in the US for quite a while, but they were never pushed very hard at all. My PNC debit card (but not the credit card, oddly enough) had a contactless chip in like 2010 or so, and I used it without issue in stores like Target and Best Buy. I assume that it wasn't used very widely at all, though, because when my debit card was re-issued in 2014, the new version lacked the contactless chip.
  • Is Tim Horton's merely OK? If Horton's is really good, the better comparison is Krispy Kreme. Dunkin' Donuts are meh.
  • I find it's the opposite. A good donut, in my opinion, tastes great plain, without any toppings or glaze. And Krispy Kreme doesn't make any. They're all glazed at least once. It's a mediocre donut soaked in sugar. Anything people like about KK, IMO, is the sugar rush. That's all they have going for them. Dunkin Donuts are not great. They do come plain, and they're just "pretty good." But I think it's a more honest donut, that isn't covered in a glaze, that you can taste on its own. And they have more frosting choices, too. Nothing wrong with a glazed donut, but they're so much better when the donut doesn't need the glaze. So you find some local donut shop and they make awesome plain donuts... compare their glazed donut to Krispy Kreme's regular product and you'll see what I mean.
  • Dude shut up man! This is an apple blog not a donut blog creep! Sent from the iMore App
  • Even with all of the publicity in the U.S., my wife has had her iPhone SE since launch and only this past weekend found a single place that takes contactless payment (edit: in rural southwest Michigan no less!)... about three months later. Part of it is she doesn't know where to look and is used to using her credit card, but many (> 80% in suburban Chicagoland) stores have new terminals that take chip cards but intentionally do not accept NFC readers, or at the least, don't have the NFC icon indicator that suggests contactless payment is possible.
  • Same thing in downtown Chicago. Lots of new chip card readers w/o contactless support. Has anyone seen a chip or contactless card reader in a non-fast food restaurant in the US? They are ubiquitous in Canada & Europe but I've never seen one here.
  • Yeah, in DC, I use it all the time. Trader Joe's, Fresh Market, and Whole Foods all take the tap to pay. I use it every chance I get, but I'm very frustrated by the way that Target and others have decided not to support it, at least for now.
  • It works in almost all cabs in Chicago. I've been using tap-to-pay in Chicago cabs since back when Android Pay was still Google Wallet, and if Android Pay works, I assume Apple Pay does as well. Also, my local ShopRite grocery store just activated tap-to-pay and chip readers on all of its terminals. Other than that, though, I almost never see it outside of fast food joints.
  • Even though ApplePay was introduced in the US initially the biggest issues with the US is the very fact that terminals with NFC/EMV has not been installed or enabled. This same issue by the way is also slowing down electronic payments in the US,. I believe that ApplePay and Android Pay international deployments will be a different scenario compared to the US. IF you know it's going g to work you will use, if you have to roll the dice Everytime you make a purchase in the US you don't know if it will work will make you hesitant on using it again, compared with Canada, you can use applepay virtually anywhere due to the updated terminals and the 5 main banks in Canada coming on board . I believe the US will come on line it just will take little longer. Thus at this point, the experience in Canada is more seamless and available making ApplePay so much easier to use.
  • my first attempt at apple pay here in canada didn't work-- but it turns out that the terminal didn't accept my plastic card's tap either! after that first glitch, it's been super smooth and convenient (especially with the watch), using it everywhere!
  • It wasn't too long ago iMore also contributed to the NFC FUD. Funny how things change
  • There's no FUD in that article whatsoever. The only time NFC is even mentioned is to point out that it's limited by distance, which is completely true.
  • All one has to do is look at the title and comments by the author. Inflammatory headlines comparing two incomparable technologies just to fan the flames of ignorance. FUD pure and simple (next article by iMore; Apply pay vs Ford Fiesta)
  • All that article says is that the use case for iBeacon and NFC are very different, which is really, really obvious. Either you're confused about what FUD is, or you pasted the wrong link.
  • People had the same reactions when I used Google Wallet BACK IN 2011. Posted from my Nexus 6P
  • Surprise surprise here you are again making another stupid comment on an Apple Centric site. Don't you have anything better to do than lurk around on iMore using your Nexus 6P to post nothing but negative comments?! Yes Google Wallet came out first whoopty doo! Much like everything that comes out first on Google it takes a very long time to catch on. Wallet was such a fail that Google had to respond to Pay a year later by announcing Android Pay and what do you know Android Pay is still miles behind Pay in support from banks. Samsung has done a better job with their payment system than Google has.
  • Did Google Wallet come out first though? I used MotoPay in 1999 so Androids can eat that! Followers ;) lol Sent from the iMore App
  • Since you used MotoPay and then Google Wallet how has it been working for you since with mobile payments? Do you use it much on your first and best technology according to your comments?
  • Ignore my last comment this was ref to the two previous comment.
  • I don't know. I've been using apple pay everywhere. I'm in Missouri and a lot of places take it. I don't even carry a wallet anymore. Even terminals without a sign I try it on. Most other I download a pass for. I love the system and have fully embraced it.
  • I'm in SW Michigan.. near the main strip I live; most locations take tap-to-pay now. Meijer, McDonalds, several gas stations (only 1 at the pump though) Panera Bread. A local Hardings Grocery store just picked up support as well. I use my Apple Watch to pay for things more often than not now. I still keep a few critical cards with me though.. The future wallet is a watch.. that much seems to be a given now. it makes sense.. It's always attached and with you, adds additional functionality, and can be more secure.. Michigan is looking at Digital SS Cards and drivers licenses.. Once we see those come, I'll be all over that.. Cannot come fast enough.. :)
  • I live in Michigan also, only problem is the places that take tap to pay are the places I hardly go to so it's more a novelty than a convenience.
  • I'm seeing it more and more here in Des Moines, IA. It really is easy and convenient. My wife hasn't jumped on the train yet but anywhere they offer it I use it.
  • Bought a drink at a Walgreens using my Apple Watch yesterday. Have to admit, it was kinda cool. I try to use Apple Pay whenever it's around, it's so much faster than the chip readers. Sent from the iMore App
  • Been using Apple Pay with my A Watch since it came to Canada, and love it. Only issue I have is many retailers here in Canada, have set a limit on "Tap to Pay" of $50 or $100. The reason they do this, is understandable, if you loss your CC or Debit Card, someone could tap large expensive items. However, since Apple Pay is much more secure than this, there really should not be any restrictions on it. As it stands, I still need to carry my wallet with me for times when I need to make purchases above $100. Also this should be available at Bank ATM machines, so that if a place does not accept Tap to Pay, we can still go to an ATM terminal and wirelessly withdraw money, so then I would have no reason to carry my wallet any more. (Hope that governments come up with a way to have electronic Drivers Licence etc). My ideal would be to make my wallet completely obsolete. Just use my phone, or even better, when the A Watch gets powerful enough, just my watch.
  • After my wife had her credit card number stolen several times now. With Apple Pay she uses it whenever she can because it is in fact more secure then the mag swipes even if the store gets hacked thanks to the way Apple Pay processes the payment her number shouldn't be compromised in those events (Home Dept, Target etc) the fact it works so quickly is just a bonus. Though having to sign when its over a certain dollar amount and it not being just about everywhere gets old.
  • "O Canada!
    Our home and native land!
    True patriot love in all thy sons command..."
    I'm not Canadian but golly, reading Rene's article made me so patriotic...
  • Yeah, it's pretty cool to get that reaction from people. I never even ask if they accept Apple Pay, cause I don't even think many of the workers even know what that is, never mind whether it's accepted or not. I basically look for that little NFC sign and voila, place my phone there and hope it works.
  • From here in Oz I'd have to echo Rene's comments. The lack of speed from the banks to take up Apple Pay has been very frustrating. Although there is a glimmer of hope now that ANZ has broken rank with the other majors. I have Amex on my Apple watch and it is great, but there is less acceptance of Amex beyond major retailers (Amex charges higher merchant fees). Often at smaller retailers where Amex is accepted Amex is insert and pin (yes, like an animal!) and "tap and pay" is restricted to Visa and MasterCard.
  • Honestly Canadian banks were resistant at first. The best way to show them that it's wanted is to find their social accounts. Then post up as a customer asking when they plan to support it. We are the customers and if it's more convenient for us then they should be interested in implementing it. Social networks have become a great place to make brands and businesses really accountable. Sent from the iMore App
  • I use it at work with my 6s Plus on the snack machines. I saw the android pay sticker on the machines but decided to try Apple Pay anyway and it worked.
    One of my students saw me do that and now a bunch of them use it as well.
  • The one place I really enjoyed the benefit of paying with my phone was my last contract job where all the vending machines supported NFC. I rarely ever carry cash and never carry enough change for a vending machine. I really wish the company I work for now would upgrade their machines. It was purely by luck this morning I remembered to dig around my spare change dish for some quarters to bring today so I can grab a soda at work.
  • This is an excellent article. I have an Android, not an iPhone, but Apple Pay, Android Pay, and Samsung Pay are the future. Those will become more common and completely mainstream in the near future. Posted via the iMore App for Android
  • "... it's the best thing to happen to consumers since the advent of paper money" More so than cheques, debit cards and contact less payments? Don't be ridiculous. Apple Pay is a neat idea (especially to their shareholders) but is slower than using a standard contactless card. This is why when I'm in the queue for the ticket barriers on the London Underground I avoid the one with the people clutching iPhones. Those extra couple of seconds ruin the otherwise swift flow of commuters in rush hour.
  • I use Apple Pay on the London underground all the time. If you pre-arm the Apple Pay card it is as quick if not quicker than anyone else using a tap card or ticket!!!
  • How is it slower? Also at one point I would be willing to bet when credit cards were just being introduced people stood in the cash line because it was faster than those plastic cards. Sent from the iMore App
  • I believe the issue is with the back end computer systems of the Banks of where you are at because it sure isn't slow in Canada, not slow at all......
  • The main reason I upgraded from my perfect iPhone 4S to an iPhone 6 was Apple Pay. Both of my cards had to be replaced the previous summer because they had been compromised. No, contactless payment isn't nearly as ubiquitous yet here in the States, but I do appreciate being able to use Apple Pay everywhere I can. It has changed my shopping habits, favoring retailers who support Apple Pay.
  • I was at a store and my wallet was at home. I had on my Watch and my iPhone but it wasn't until I already stepped away from the register waiting for my wife that I remembered I could have used Pay. Now that all the banks in Canada finally support it I've loaded up my cards. The only problems I face is the card we use most is a Walmart Mastercard which gains points we can use for free purchases at Walmart. Since Walmart has their own payment "solution" that card most likely will never be supported. The CIBC Mastercard which we use to buy gas because we earn points and get money off. CIBC is having some issues with the points and money off when paying with  Pay. These are all growing pains and I'm also thinking of changing our main card to one supporting Pay. Standing in a bank yesterday I thought. I can't wait until I can use my phone and my fingerprint to authenticate myself. It will be much faster and more secure than a PIN. I mean it's my fingerprint. Sent from the iMore App
  • Fingerprint isn't as secure as a pin but definitely more convenient.
  • There are always updates of evermore banks on board with Apple Pay, but, very little information about more vendors and resellers coming on board. My problem is rarely that the banks representing my debit and credit cards aren't on board with Apple Pay, my problem is no stores in my area, with very few exceptions, can or will except Apple Pay payments. In So. IL, I shop at Sam's, Walmart, Target, Kroger's, and etc., and none of the stores take Apple Pay. Just last weekend I tried using it in a Petco, or maybe it was a Petsmart, (I don't remember), because I had left my wallet in the car, the terminal recognized that I had an electronic payment device in my hand, but would not except Apple Pay. So, I'm thrilled that more and more banks are on board that of course is very necessary, but now I need to actually be able to use it and that means way more vendors need to facilitate this payment method. Target seems like a very apple friendly store, except when you get to the checkout, there you cannot use Apple Pay even though there are some fairly decent apps target provides for iOS users. maybe Apple needs to begin to do more serious negotiation with big retailers on a national scale.
  • Can't remember what podcast it was but the pundits were accurate in saying Apple is missing the chance to pimp this technology. Sure lots of banks are adding but what retailers? Apple needs a task force out there wooing retailers. They need ads showing the benefits to consumers who can then pressure their favorite businesses to add it. Heck, make a silly ad showing chip-and-pin vs Apple Pay. Taking the card out too soon, errors, angry buzzing vs simple tap and ping!
  • The US can't even get chip cards working, but the biggest frustration is the lack of places accepting NFC. McDonalds, no problem; Walgreens, no problem, everywhere else I go: no choice. Went to CVS this weekend and tried to swipe my card, beep-beep-beep, oh didn't realize they had the chip reader, my bad. Went to 7-Eleven, realized I was going to be using a chip card, looked at the terminal, piece of paper taped over the slot that the chip reader was out of order. Doesn't even help that my primary bank (USAA) hasn't even replaced my debit card with a chip card yet, and that's the card that has been stolen 5 times in the last 3 years (not out of my wallet but from data breaches at stores).
  • Don't do the disservice of comparing Tim Horton's to Dunkin Donuts Rene. There's no comparison. Dunkin Donuts is horrid.
  • So much FUD...