Apple Pay doubters question whether anyone will swipe their iPhone at a store checkout counter. But as mobile shopping booms, Apple Pay is already showing huge returns for early adopters.
It’s a small sample size, with Apple Pay only out since late October, but so far iPhone owners with the service enabled are vastly more likely to make online purchases on their phones. Take sports and concert ticket search app SeatGeek, whose sleek new checkout screen boasts a conversion rate up to 30%. With Apple Pay, that follow-through rate shoots up to 80%.
“Apple Pay is convenient in a physical store, but you’re never going to Wal-Mart because of Apple Pay. It’s a triviality,” says SeatGeek cofounder Jack Groetzinger. “But you are going to buy tickets on SeatGeek with Apple Pay in a case where you wouldn’t have otherwise. That’s huge.”
Crowdfunding site Indiegogo has seen similar results, according to CEO Slava Rubin. Conversion rates on users funding Indiegogo campaigns go up by 2.5 times when using Apple Pay for the transaction. Rubin, who made sure Indiegogo included Apple Pay functionality on day one, attributes the bump to his customers enjoying Apple Pay’s ease of use.
Mobile shopping apps are growing faster even than messaging and social apps as consumers get more comfortable buying on their phones — and as the experience gets easier. Fumbling to enter a credit card number into tiny tap targets turns off many potential customers. Apple Pay bakes that payment information into your phone, so purchases only require a quick fingerprint check.
“Apple made a big deal about it, but then no one integrated it for a while,” says Groetzinger. “In the app store a month ago not many apps had it. People are only just discovering now.”
SeatGeek app users also spend more per transaction on Apple Pay, although that may be attributable to user demographics. People who bought the latest iPhone 6 and 6 Plus models aren’t hurting for cash.
The biggest annoyance for Groetzinger is that Apple Pay isn’t cross-platform. SeatGeek’s Android native app is growing even faster than iOS, but Google Wallet doesn’t have the same power. “If you get to that Apple Pay button, you’re probably about to spend $1000,” he says. “The ease of it really works, but there’s no corollary on Android, which I’m bummed about.”
Google is undoubtedly aware.
By Brian Solomon