Why Is Almost No One Using Apple Pay?

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(This post originally appeared on Forbes)

Do you use Apple Pay? Or Google Wallet? Or any other mobile payment service on your smartphone? No, I didn’t think so. No one seems to be using their smartphones to pay for stuff. Well, almost no one.

We don’t want to carry around credit cards, or even our wallets, right? But we still have to. With all of the hubris and excitement over mobile payments I rarely see anyone buying things at stores and restaurants with their mobile devices. My family, friends and work colleagues all own iPhones or Android smartphones. We’re not afraid to download Apple Pay or Google Wallet or another mobile payment service and get it configured. And yet, we are still overwhelmingly using credit cards like we’ve always been doing.

Why? Small merchants aren’t getting on board.

A report released last week found that 87% of small merchants still do not accept mobile payments. And that number seems kind of low to me, given my experience. If I want to eat out at any one of my favorite restaurants I’m forced to use my credit card, assuming the restaurant even accepts credit cards (because a great many still operate as cash only). If I want to go to a local coffee shop, grab a sandwich at a street vendor, pick up groceries, get a prescription filled, buy some of that ridiculously expensive specialty dog food my wife insists on from the local pet store…even take the subway I need a credit card to pay.

Since introducing Apple Pay back in October, 2014 the company will tell you that it’s available in more than700,000 locations including Bloomingdales, Macy’s, Duane Reade, McDonald’s, Sephora, Petco, Panera Bread, Staples, Nike, Walgreens, Subway, Whole Foods and Marriott. Sounds great! But when I go to these places, I look around me and see everyone still using credit cards. I’m automatically asked at checkout to produce a credit card for payment. I’m assuming the employee at the register is familiar with the mobile payment process but I’m betting it rarely happens.  I don’t want to be that guy holding up the line while we fumble around to get it all to work – just like the guy who holds up the line boarding an airplane because his mobile boarding pass can’t be read. Let’s face it – it’s just faster and more familiar to swipe (or dip) and move on. Using my iPhone at these stores is not intuitive or quicker or even encouraged.

Credit card issuers are paying “about 15 basis points, or 0.15% of an Apple Pay purchase, for what amounts to a guarantee by Apple that a tokenized and biometrically verified transaction is good.” That’s a cost that is difficult to pass down to their customers, so the incentive for the credit card companies to promote Apple Pay is not significant. They’re doing it. But grudgingly.

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