I've been reading comments on various news articles and speaking to friends and they all say that they don't t understand the point of Apple Pay as they can just use their cards.
It's important to understand that the vast majority of Americans seemingly have no problems with the current credit/debit card system in spite of the breaches that have been in the news; people still use their cards at places like Target and Home Depot for instance. Even if you were to be hit with fraud, all it takes is a phone call and the money is back in your bank account/the charge is removed from your credit card statement. Yes, Apple/Android/Samsung Pay have superior security compared to magnetic stripe and to a chip-enabled cards to a lesser extent, but why would consumers care about that when the consequences of fraud are effectively shielded from them already*?
That leaves the main supposed advantage for consumers: convenience. Even here phone/watch based payments isn't compelling enough for most for a few reasons. One reason is that in other countries NFC/contactless payments at least allowed for people to not have to enter their PINs for small purchases; in the US most places already don't bother asking for a signature** when you swipe unless the purchase is large enough. Even when chip transactions become more common in the US, they won't be nearly as annoying as elsewhere simply because we're doing chip and signature instead of chip and PIN; as a result the same signature waiver for small transactions will still apply.
Another is that transaction times aren't annoying enough as they are now. Most of that is because we're still on the swipe and sign system, which takes about the same amount of time or maybe less compared to an Apple Pay transaction (assuming you're using an iPhone and not the Apple Watch. More on that in a bit.) Chip will take longer than swiping but I'm going to guess that people won't be annoyed enough by it to look into NFC as an option, especially since the only thing that will be changing is how the card's put through the terminal.
Third, a phone is still something that needs to be taken out of a wallet or purse. It takes the same amount of time to remove a phone as does a wallet. Touch ID has to be authenticated before it will transmit card data, which takes about a second or so. There is some time savings if you have a ton of cards that you have to sort through but that doesn't seem to be a common use case. Here an Apple Watch does save significant time compared to the iPhone simply because it's already out and there's no extra authentication step necessary.
What does all that result in? Fairly slow growth of NFC based payments in general IMO. The one plus is that way more places accept it than before Apple Pay came out, but even then a fair number of places just aren't going to turn on NFC support at the same time as chip or possibly ever. Target and Walmart are big examples of such retailers--Target supposedly to do so "eventually" and Walmart never. It's even possible that it will grow too slowly for those banks and retailers who signed up early on, causing some to end support altogether.
Don't get me wrong, I
love Apple Pay and contactless/NFC. Paying with the Apple Watch is awesome and is one of the main reasons why I got it. I want those solutions to succeed regardless if it's Apple, Samsung, Google or someone else providing them. But that technology has a lot of challenges that it needs to overcome before it becomes ubiquitous in the US.
*For debit cards, fraud does cause money to come out of your account right away so that may be an issue for those living paycheck to paycheck. This is partly why the general recommendation from most people is to use a credit card instead. You'll still get your money back eventually though and the coming adoption of chip should make debit cards safer to use for purchases. There's also the issue of updating recurring billing but most issuers seem to mail you a list of recurring charges after reporting a breach to help with that.
**Debit cards have PINs but it's actually possible to avoid ever having to enter one for purchases, either by only visiting stores that can't run them as "debit" and/or by always choosing "credit"/canceling the PIN prompt. It doesn't look like this behavior will change for chip-enabled debit cards.
