After failing to capture even 3 percent of iPhone users’ purchases on Black Friday, Apple Pay will try to relaunch next year in Europe and Asia in an effort to rescue Apple’s reputation for invincibility.
Apple had been working on the iWallet since 2010. Moreover, Apple’s CEO Tim Cook launched Apple Pay for the iPhone 6 to a screaming audience on October 20, 2014. Booming sales of iPhones and anticipation of Apple Pay had been a major reason Apple’s stock had doubled in the prior year. The crowd was whispering that Apple Pay was the segue product for Apple to open their own bank.
One of Cook’s slides featured a quote from the New York Times: “A truly mobile wallet has long been described as imminent. But it remains elusive … most have been a disappointment or have not worked well enough for mainstream adoption.” Cook sneered at what he said was the Times inability understand a disruptive future.
Apple Pay got off to a good start as users seemed to appreciate the golden combo of ease of use and perceived high security. Apple iPhone 6 owners used Apple Pay for 4.9 percent of eligible Black Friday transactions at participating merchants in 2014. Wall Street analysts cranked up huge expectations that as participating financial and retail merchants swelled, iWallet could drive Apple’s stock price to double again.
Apple Pay was able to sign up 800 banks, credit unions and financial institutions as credit issuers. But despite Apple trying to do everything it possibly could do to broaden distribution deals with retailers, progress has been very slow.
The company only recently announced 2016 U.S. retail distribution rollouts with Cinnabon, Kentucky Fried Chicken, and Domino’s company-owned pizza parlors. Despite lots of rumors about a national Starbucks deal, Apple Pay was only able to negotiate a pilot test pilot in 2016 and the hope for a potential national rollout in 2017.
With product momentum slowing fast, iPhone use of Apple Pay for eligible 2015 Black Friday transactions crashed to just 2.7 percent in 2015, according to InfoScout. At that level, Apple Pay is just slightly ahead of the 2 percent of eligible transactions captured during Black Friday by Android’s Mobile Wallet.
Apple Pay failure is a major reason that Apple’s stock is -20 percent down from its annual high and recently entered a “bear market.”
Hoping to relaunch Apple Pay overseas, InfoScout reported last month that Apple has signed marketing deals with Union Pay, the only bank card processor in China; Visa Europe; and a Canadian limited distribution deal. It is expected that China, Hong Kong, Singapore and Spain will be activated in the next 90 days.
Chief Executive Officer Tim Cook said 2015 would be the “year of Apple Pay” in January. He indicated that Apple Pay sales volume tripling should be a no-brainer with the sales of millions of Apple Watches and tens of millions of iPhone 6 Plus.
Apple Pay’s failure has undermined the invincibility of Apple’s brand. The company can only hope that a successful European and Asian relaunch will rescue Apple Pay and the brand.