eMarketer reports that for the first time, a generic mobile payment app has become more popular than Starbucks’ mobile app, which was an established leader in the category for many years, even though the app is specific to just one retailer.
Last year, Apple’s (NASDAQ:AAPL) Apple Pay platform became the market leader, as approximately 27.7 million US-based consumers used the tech giant’s app to make everyday purchases.
eMarketer’s report noted that Apple Pay’s user base has grown even faster than they initially expected, when the company released its forecast in May 2018. This year, Apple Pay has an estimated 30.3 million US-based users, which accounts for 47.3% of proximity mobile payments clients.
The Starbucks app is expected to have around 25.2 million users this year, accounting for 39.4% of proximity mobile payment users.
eMarketer principal analyst Yory Wurmser stated:
“Apple Pay has benefited from the spread of new point-of-sale (POS) systems that work with the NFC signals Apple Pay runs on. The same trend should also help Google Pay and Samsung Pay, but they will continue to split the Android market.”
Technology for proximity mobile payments is increasingly being used at frequently visited retailers such as grocery stores. Digital Trends reveals that Apple Pay will be available in 70% of US retailers by the end of this year. Due to the stronger than expected uptake, eMarketer had to make adjustments to its initial figures.
Although the Starbucks app has maintained a sizeable 40% market share of mobile payments users for the past few years, the app’s growth potential is quite limited as it can only be used at Starbucks locations.
Total spending using proximity mobile payments is reportedly approaching $100 billion in the US alone. The average user will spend around $1,545 each year using proximity mobile payments, which is up over 24% from the previous year.
The total number of US-based proximity mobile payments users is expected to increase by 9.1% to around 64 million, representing almost 30% of all US smartphone users.
eMarketer junior forecasting analyst Vincent Yip noted:
“With in-store payments, there is a need for convenience that proximity payments are increasingly fulfilling. Although a growing number of millennials feel secure using payment apps, virtually all still find credit and debit cards equally convenient.”
While proximity mobile payments are increasingly being used across all age groups, US adults between the ages of 25-34 are the app’s largest demographic, with 21.2 million users, or almost 50% of all mobile phone users in the age group. Americans aged 55 to 64 represent the fastest growing group, however, they’re a relatively small user base.