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Did Apple’s ‘Red Circle’ Tactic Lead to More Active Pay Users?

Grace NotobyGrace Noto
May 2, 2018
in Payments
Reading Time: 2 mins read
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The number of consumers making use of Apple’s mobile payment service is increasing, but are these users really, well, using it?

The company more than doubled the users for its namesake payment service, Apple Pay, according to CEO Tim Cook on the company’s second quarter earnings call yesterday.

This year-over-year increase is part of the technology provider’s overall services growth, a category that grew 31% QoQ and includes digital content, AppleCare, and other services as well as Apple Pay.

However, it’s worth noting this level of growth comes after the company reportedly made signing up for Apple Pay the last step in configuring one’s iPhone: users who did not sign up for it saw a persistent red circle appear over their settings icon, combined with notifications, until they began the enrollment process. (Remember when Apple was the anti-Microsoft?)

It is unclear how many new users of Apple Pay became active users: that is, began to make transactions through the platform, as the company does not report user numbers or transaction volume for the service.

Cook said on yesterday’s call:

[Service] revenue topped $9 billion for the first time, up more than $2 billion over last year’s March quarter. We had all-time record revenue … all of which are a powerful illustration of the importance of our huge active installed base of devices and the loyalty and engagement of our customers.

Apple Pay continues its strong growth with active users more than doubling and transactions tripling year-over-year.

These metrics also don’t mention where the new users of Apple Pay come from: the service launched in several new markets last year (it’s now available in 21 markets), including Denmark and Finland. The company has struggled to gain a foothold with the mobile payment service amongst consumers in the U.S., who traditionally remain attached to their plastic debit or credit cards.

Apple Pay will expand its reach further this year, launching in Norway, Poland, and the Ukraine over “the next several months,” Cook said. Company shares are currently trading at $176.01, up 4%, as of 10am ET. The company reported total quarterly revenue of $61.1 billion, a 16% increase from last quarter. The earnings transcript may be viewed here.

Tags: AppleApple Payauto-enrollmentdebit cardsearningsExclusiveMobile Paymentsonline payments
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