We completed our annual Apple Pay review and found year over year growth has been impressive with active users more than doubling (source: Apple), transactions more than tripling (source: Apple) and online merchant adoption increasing by ~50% (source: Loup Ventures). That said, we believe only 16% of global iPhone users have turned on Apple Pay. We remain optimistic that Apple Pay will gain widespread adoption over the next 3-5 years given integration OS and iOS makes it the easiest to use digital wallet.

• We checked the Top 100 retailers in the U.S. for Apple Pay compatibility for online (desktop, mobile and apps) and found the growth of adoption has been high (9 to 85%), but off of a small base.
• The total number of these retailers supporting Apple Pay online now ranges between 14-24% (details in table below).
• The number of banks globally that support Apple Pay increased in the past year by 41% to 2707 banks.
• We believe there are 127m global active Apple Pay users, up from 62m a year ago. This represents 16% of the active iPhone base.
• We don’t have any data on Apple Pay peer-to-peer (Venmo competitor), which launched in December of 2017.

Putting the Top 100 retailers’ online offering under a microscope. Credit Loup Ventures analyst Mark Grangaard for working through our annual Apple Pay review, which includes conducting 300 transactions to test availability and speed of Apple Pay among the U.S. Top 100 retailers (as determined by eMarketer) across desktop, mobile and app . Growth was encouraging off of a small base. Apple Pay debuted in October of 2014, and U.S. online adoption among top retailers ranges between 14-24%, a small number considering it’s been available for over 3 years.

What Apple has said in past 12 months on Apple Pay. Apple periodically gives Apple Pay updates, here’s what they said over the past year:

• Adoption and usage in international markets has been much more robust than in the U.S. (February 2018, shareholder meeting).
• User adoption has also been slower than what had been expected at Apple Pay’s launch (February 2018, shareholder meeting).
• More than half of all U.S. retail locations accept Apple Pay (February 2018 earnings call).
• Transactions more than tripled y/y (February 2018), they were up 330% (October 2017), up 450%, (May 2017), and up over 500% y/y (January 2017).
• Active users more than doubled (October 2017 earnings call).
• Nearly 90% of NFC payment transactions globally are with Apple Pay (August 2017 earnings call).
• 3 out of 4 of Apple Pay transactions happen outside the U.S. (August 2017 earnings call).

Putting a fine point on Apple Pay users. The following are Loup Ventures’s estimates on Apple Pay adoption.

• End of 2016, there were 62m global Apple Pay users, or 8% of active iPhones had activated Apple Pay.
• End of 2017, there were 127m global Apple Pay users, or 16% of active iPhones had activated Apple Pay.
• 16% base, international accounts for 11%, and U.S. for 5%. Said another way, 89m people use Apple Pay globally, 38m in the US.
• Between 20 and 30% of U.S. iPhone owners use Apple Pay.
• ~30% of new iPhones are activating Apple Pay.
• There are 795m active iPhones worldwide.

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