Why Are So Few People Using Apple Pay?

Shortly after Apple Pay launched a study found that people try the payment service once, but don’t continue using it. Two years later, Apple still hasn’t convinced a large majority of iPhone users to pay with their device instead of what’s in their wallet.

The Wall Street Journal reports that while many Apple device owners have picked up Apple Pay, others have steered clear of the digital wallet, citing security concerns and a lack of accepting retailers.

Apple Pay lets iPhone users store virtual versions of credit and debit cards on their phone. At participating retailers, the customer just holds their iPhone up to a device connected to the register, then confirms the purchase with a fingerprint or PIN.

The service can also be used as the default payment option for purchases made online or in certain apps.

While the system might sound fairly simple, a recent report from Creative Strategies found that many consumers don’t feel that way.

In fact, more than 60% of consumers surveyed aren’t familiar with contactless payments. Others said they were concerned about the service itself, with 40% worried about the security risks of adding a payment card to their phone.

Shortly after the service launched, a colleague at Consumer Reports tested out the feature’s scanning ability, and found he was able to upload his wife’s card without taking additional steps to authorize the card.

Another issue many consumers say has kept them from using the service regularly is confusion over who accepts the payments. When Apple Pay first launched it was only available at certain retailers, with some explicitly banning the payment option.

Since then, however, Vice President of Apple Pay Jennifer Bailey tells the WSJ more than half of the 100 biggest merchants in the U.S. accept Apple Pay.

But that doesn’t mean using the service at places like Best Buy, McDonald’s, or Starbucks is easy. One user tells the WSJ he recently had to show a McDonald’s employee how Apple Pay worked.

Competition from rival payment services — such as Android Pay, Samsung Pay, and others — has also hindered Apple Pay’s reach, some analysts say.

Despite consumers’ apparent reluctance to use the service, Nilson Report believes the payment option is on close to gaining broad acceptance.

To that end, the WSJ reports that Apple CEO Tim Cook recently said the number of people using the service has tripled over the past year. While the company doesn’t disclose the number of Apple Pay transactions it facilitates, the WSJ reports the service brought in $30 million in revenue last year.

All this is to say that Apple isn’t giving up on its dreams of replacing cash, credit cards, and traditional wallets.

“Does it matter if we get there in two years, three years [or] five years?” Eddy Cue, Apple senior vice president in charge of internet software and services, tells the WSJ. “Ultimately, no.”