Apple Pay was responsible for 1% of digital payments in the US in November, only a month after its launch.
The Apple Pay mobile wallet was launched to iPhone users in the US in October. In comparison, Google Wallet, which was launched in 2011, only accounted for 4% of payments last month, according to the ITG Mobile Payments report.
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The Apple Pay system allows iPhone 6 and iPhone 6 Plus users to pay for goods and services using a combination of the mobile wallet and fingerprint authentication.
“Based on early trends since the October launch, the research finds that Apple Pay has the ability to significantly transform the mobile payment space,” said the ITG report.
“Apple Pay was responsible for 1% of digital payment dollars. This is a strong showing considering that the service is only available to Apple customers with the newest hardware and it is currently supported by a relatively limited list of merchants.”
ITG said Apple Pay could even threaten PayPal's dominance of the mobile payment market. Steve Weinstein, senior internet analyst at ITG Investment Research said PayPal's “challenging relationship with payment counterparties and the lack of biometric capability”, compared to Apple Pay's offering, will make it difficult for PayPal to match the ease of use and consumer appeal of the Apple Pay.
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The research found that 60% of new Apple Pay customers used it multiple times through November, suggesting strong customer engagement. It revealed that during the same period, 20% of new PayPal customers used the service on multiple occasions.
It said Apple Pay customers used the service roughly 1.4 times per week.
The Apple Pay mobile wallet claims to keep data safe by ensuring no card or transaction detail is left on the iPhone. Instead, a Device Account Number is generated and stored in an encrypted partition on the device. This number is then used when transactions take place.
But a study of more than 6,000 people from Bizrate Insights, found that only 21.4% of people trust Apple with their bank details. In comparison 72% trust their banks, 48.9% trust Paypal, 45.4% trust Amazon and only 12.9% trust Google.