A new report from Reuters says Apple Pay is struggling to gain a foothold outside of the United States. The report says the contactless payments system has only made a “small dent” in the global payments market, as it has faced technical challenges, low consumer adoption, and resistance from banks.
Apple Pay usage in 2015 totaled $10.9 billion. As could be expected, most of that came from the United States. Apple Pay has been available in the U.S. since 2014, and did not begin rolling out to other countries until 2015. The service is currently available in the U.S., the UK, China, Canada, Australia, and Singapore.
Apple Pay is facing a definite uphill battle in China, where it has to compete with established payments services, Alibaba and Tencent. Reuters says Chinese users complained that using Apple Pay is not as seamless an experience as using WeChat, Tencent’s payment service.
British and Australian consumers already have wide access to contactless payment cards, so many don’t see the value of taking the time to add the cards to Apple Pay on their iPhone.
“You have over 86 million contactless cards in circulation, you have to persuade Britons to register their cards to the (Apple Pay) service when they can already use them to make a contactless payment,” said Juniper Research analyst Windsor Holden.
Apple Pay’s global rollout is being slowed by the need for Apple to negotiate transaction fees with multiple partners in each country. While Apple wets its beak to the tune of around 15 cents per every $100 charged in the U.S., they’ve been forced to take less in some countries.
Apple also faces resistance in countries such as the UK, Canada, and Australia, as banks there already have a competing payments product in place, or are developing one.
“Payments in general is such a complicated system with so many incumbent providers that revolutionary change like this was not going to happen very quickly,” Joshua Gilbert, an analyst at First Annapolis Consulting, told Reuters.
Despite the obstacles faced by Apple with its payments service, it does have a jump on rival services, such as Samsung Pay and Google’s Android Pay. Samsung Pay is only available in three markets: China, South Korea and the United States, while Android Pay just launched in the U.S. back in March, and in Britain in May.
