Apple Pay on Safari: A Reality Check

canstockphoto4402637Stop the presses, er, tweets! Something is happening with Apple Pay!

The underperforming mobile payments platform from Apple will be available for use on Safari later this year, the world learned yesterday. While not entirely unexpected, the news has rocked the internet, dwarfing coverage of Google’s launch of a new livestreaming platform, for example, and AI advances from both Google and Microsoft.

But is all the attention merited? The promise of Apple Pay in Safari is fewer abandoned shopping carts, and while cart abandonment is a pain point for mobile retailers, Apple Pay has not fared so well in stores — will the mobile web be different?

While it’s true that iOS users spend more than Android users, there are plenty of reasons to be skeptical. Safari usage is limited, Apple Pay adoption is also paltry, PayPal and others offer this solution already, and it’s not clear what terms Apple will ask of retailers.

Last month, Safari claimed about 18% of the world’s mobile browser usage, down from 22% a year prior. And not all of those users have Touch ID, let alone use Apple Pay. A recent survey from First Annapolis suggests issuers can expect 1% to 2% of Apple Pay users to use the service more than two times. These are not big numbers.

PayPal’s OneTouch solution, used by more than 250 of the Top 500 online retailers, has not proved to be the silver bullet retailers are after. “The biggest issue is many of the retailers haven’t made PayPal integration at its best,” Moovweb’s Haresh Kumar told TheStreet last month. “When it’s done right, it’s much easier to checkout, but in most of the cases it’s not done well. There are bugs with the integration. It’s causing increased dropoffs and lower conversion rates.” Apple’s solution is “quicker and cleaner,” according to Re/code, so this could tip the scales. Maybe. PayPal takes a cut of some Apple Pay transactions as it is, with subsidiary Braintree processing some payments on the backend.

The question of retailer integration raised by Kumar is significant. It is not clear what terms Apple will ask for, but it won’t be free, based on Apple’s deals with the banks, which are unlikely to be renewed. Major retailers are scrambling for mobile payment solutions of their own, which may further dampen enthusiasm for Apple Pay.

Finally, there is the issue of Amazon’s one-click patent. Based on a 1998 patent for payments using “a single action,” Amazon may be putting a toll on every one-click purchase out there. Last summer, Pay Finders founder Brain Roemmele commented that Apple was looking for a way around Amazon’s one-click chokehold, Considering all the headwinds facing its Pay, Apple had better find one.

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