Are Retail Stores Ready for Apple Pay or Android Pay?



Obstacles for mobile wallet companies

Mobile wallet companies such as Apple (AAPL) and Google (GOOG) are struggling to boost e-commerce through their respective Apple Pay and Android Pay apps. Most US retail stores don’t accept payment via smartphone.

A recent survey conducted among US merchants by The Strawhecker Group, a payments-focused management consulting company, revealed that a meager 27% of merchants are open to accepting new chip-and-PIN credit and debit cards by October 1.

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The October 1 deadline’s been set by payment processors EMV—Europay, MasterCard (MA), and Visa(V). After this deadline, US merchants are accountable for fraudulent transactions from credit cards. Both Apple and Google hoped for new checkout terminals that could accept chip cards as well as mobile payments from smartphones. However, the fact that only 27% of merchants are ready to accept the new checkout terminals has caused serious concern about the expected mobile wallet revolution.

As shown in the graph above, the percentage of US merchants expected to adopt EMV is 44% by December 2015. This is expected to reach a threshold of 90% by 2017. For diversified exposure to Google, you can invest in the Technology Select Sector SPDR ETF (XLK). It invests about 3.63% of its holdings in Google.


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