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8 month report card: How is everyone liking ‘em Apple Pay?

Since Tim Cook’s announcement in September last year, Apple Pay has been the hot topic in payments and tech industry conversations. Apple’s answer to mobile payments caused much speculation on how it will change the payments industry. While Apple Pay is not exactly disruptive or innovative (it uses pre-existing technology), it will accelerate the rapid change in consumers’ behaviour and increase mobile commerce adoption.

We’re now at the end of the 8th month after its announcement, how is Apple Pay faring so far? Let’s have a quick look.

Consumers and banks


Apple Pay was introduced alongside the release of iPhone 6 and 6 Plus in September 2014, with more than 10 million iPhone 6 and 6 Plus devices were sold in the first three days. This was followed by the iOS 8 update which saw a 56% adoption rate by November 2014. Driven by the success of the new devices and OS, Apple Pay gained a 1.7% market share in the US six weeks after the release. At the end of 2014, Apple announced that 1.9 billion iPhones were sold in 2014.

Fast forward to 2015. In Q1 of the year alone, Apple sold 74.5 million iPhones, mostly iPhone 6 and 6 Plus. In May, nearly half (46%) of owners of compatible devices have successfully used Apple Pay to make a purchase. This marks a 4% increase from just two months earlier.  It is also impressive that 63% of people have said that they used Apple Pay at least weekly.

Fuelled by consumer’s adoption of Apple Pay, banks in the US are quickly jumping onboard. In an announcement in March, Apple claimed that Apple Pay is now supported by 2500 card-issuing banks, representing over 90% of the credit card purchase volume in the US.


So what about the merchants?

In September 2014, it was announced that 200,000 US vendor locations will support Apple Pay, this included leading retailers like Macy’s, McDonald’s, Sephora, Staples, Subway, Walgreens and Whole Foods Market.

Whole Foods Markets alone had seen mobile payments increased by more than 400% between October 2014 and January 2015, claiming to be Apple Pay’s leading retailer with 3.3 million transactions from its mobile payments app.

Over at Staples, Apple Pay has become the top payment method at, with 30% of all transactions on eligible devices completed via Apple Pay.

At Panera Bread, it was reported that Apple Pay represents nearly 80% of their mobile payment transactions.

At the time of writing, Apple Pay is now supported by 67 US brands. In March, Apple announced that Apple Pay was accepted at 700,000 US locations (this includes vending machines).



Fraud is an inherent part of payments, hence it is no surprise that along with Apple Pay’s success came the news of ‘Apple Pay fraud’. In March, a hoard of news headlines about banks seeing higher fraud rate with Apple Pay emerged. It was reported that ‘Apple Pay fraud rate can reach a whopping 6% of transactions at some banks’, compared the usual 0.1% rate of traditional credit card fraud.

Apple goes to great lengths to ensure that all transactions using Apple Pay are secure by using touch ID and tokenizing the card details. In Apple’s own words, ‘Apple Pay is an easy, secure, and private way to pay.’

So where does this reported fraud happen?

It happens when a user adds a new card. The problem lies in the authentication process, which is a responsibility of the banks. It seems that some banks, not all, have made the authentication process too easy, in the hope of reducing any friction in the process of adding a card.

CNN Money has reported that “Bank of America requires a phone conversation in which you must state your name, card number, driver’s license number and the details of the latest check you wrote. JPMorgan Chase and Wells Fargo send you a one-time verification code to the email or phone number it has on file.’ These banks set up higher barriers to fend off fraudsters, but not all banks have the same secure process of authentication. Fraudsters who possess lost credit card owners’ information (home address, social security number, etc.) can easily pass a simple authentication call and add a stolen card on to their own Apple devices.

Apple Pay also enjoys a high security rating when banks assess risk of transactions. Because the above two reasons, fraudsters are able to use a registered stolen card for longer without being detected or raising fraud alerts within the card schemes.

So is it Apple’s fault or the banks’ fault? Some argue that it’s both. Banks need to ensure a tighter card authentication process and invest in staff training. Equally, Apple can certainly do more to establish best practices for new onboarding banks.

What’s next?

With Android Pay, Samsung Pay, and one-card solutions like Stratos all coming into the market in the not so distant future, mobile wallets will continue to be in the spotlight. Competition between these companies will be intense. Apple Pay has gotten a head start in the US with a continuous growth in consumer and merchant adoption rates. But how long can this edge last?

To keep sustaining adoption rate growth, Apple needs to tie in loyalty into Apple Pay, making payments via Apple Pay not only frictionless, but also rewarding. In the short term, Apple seems to be focusing on expanding the service globally, negotiating with banks around the world, with Tim Cook calling 2015 “The year of Apple Pay”.

Will Apple Pay drive us to become a cashless and cardless society soon? Perhaps not within the next year, but it does help eliminate the need for cash or plastic card transactions. Apple Pay will accelerate consumers’ shift to mobile commerce, making payments on mobile devices easy and secure. As our CEO Dennis Jones said, “Our mobile phones – the computers we carry in our pockets – will lead to a cardless society in the not-too-distant future. When this arrives, it will become the norm to digitally move money securely, from individual to individual, business to business and individual to business, with one tap of our phones.”


About Judopay · Judopay simplifies in-app payments, enable frictionless checkouts and intelligently prevents fraud for leading companies globally. Our payments and mobile experts help guide businesses and their development partners to create best in class apps to make paying faster, easier and more secure. Founded by serial financial technology entrepreneurs in 2012, Judopay is backed by leading venture investors and supported by banking and card scheme partners to offer in-app payments that are simple, frictionless and protected.

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