[Team 3: Michael Buncher, Sophia Hudak, Noah Walsh, Mark Sangster, Mahedi Miah

Apple Pay Perceptual Map and Final Paper

Business Problem Summary and Research Questions
The chosen article, “Wait, When Did Everyone Start Using Apple Pay?”, describes the
history of Apple Pay, from the growing acceptance and usage of the service to the emergence of
competitors. From the article, 4 attributes were gathered that apply to both Apple Pay, and its
competitors, including the security of the service, availability in stores of the service, usage fees
with the service, and the ability to use the service in a contactless setting. Because consumers
prefer different traits and characteristics of the payment options, various market segments will be
formed based on consumer preferences. This formed the basis of the Segmentation Research
Problem, to determine which variable is most important to each market segment.
The article listed three main Apple Pay Competitors, including Google Pay, Cash
App/Venmo, cash and Credit Cards/Debit Cards. Continuing with the segmentation analysis led
to the development of the Positioning Research Question. Through the creation of marketing
segments based on the differences in the importance of each characteristic to consumers, the
positioning of Apple Pay on a Perceptual Map in relation to consumer preferences was examined
(lam/Reuters, 2022).
Research Questions

• Segmentation: Out of the four variables that are characteristic of each service examined,
how many unique customer segments can be formed?
• Segmentation: Out of the four variables that are characteristic of each service examined,
which variable does each cluster perceive as most important to their payment options?
• Positioning: When examining a perceptual map, where does Apple Pay’s positioning lie
in relation to each segments’ perceived preferences based on the attributes used?
Brief description of your variables; rationale behind their choice; methods used to collect
and analyze data.
Availability: The variable of availability in stores is one that has become increasingly
common through the introductory stages of mobile wallets but has served as an impediment to
widespread adoption. Availability was chosen as a near control group reflecting those who
continue to use the more traditional forms of payment in credit/debit cards and/or cash. In a 2021
PYMNTS.com study, the availability of Apple Pay acceptance increased 5% from 2020, sitting
at 70% of the market. Though this number is a respectable mark, only 6.1% of eligible
transactions utilize mobile wallets, showing the preference of traditional methods. The
importance of each variable to consumers will be determined by asking them to rank the variable
on a scale of 1-5, from 1 being one of the worst to 5 being one of the best (Webster, 2021).
Convenience: the convenient options with each payment method make some more
practice than others when deciding which payment method to use. Apple pay/ Google pay, and
Venmo/Cash App allow users to only carry their smart phones when traveling and making
purchases, while cash, and credit/debit cards require us to physically have them on hand when
making a purchase. The importance of each variable to consumers will be determined by asking
them to rank the variable on a scale of 1-5, from 1 being the worst and 5 being the best in terms
of convenience
Security of Payment: The variable of security of payment has become an increasingly
thought-provoking matter for people with innovations in technology and cyber-attacks. Payment
methods such as cash and credit cards require an individual to physically carry those items
around, leaving people in danger of robbery or misplacement. Digital payments move funds
around automatically through secure networks from bank accounts, and do not necessitate
physically carrying any objects. Digital Payments however have their own security issues, like
adding risk from third-party use, phishing scams, and malware attacks.
Contactless: The variable of contactless payment has become a relevant topic since the
events of COVID-19 and how people feel about contact. The importance of distance, and
variability of life enhanced the desire of consumers for contactless payment options, to ensure
their safety. Cash does not support any form of contactless pay, and as a result, many stores
started to decline cash for checkout. Credit cards adopted a form of touchless pay to make
customers feel safer. According to eMarketer, in-store mobile payments grew 29% last year in
the US as the pandemic pushed people to a much safer option for point of sale (Perez, 2021).
The method used to collect and analyze data was by creating a survey through Question
Pro. The link to the survey was published through Amazon Mechanical Turk (mTurk), a remote
worker crowdsourcing website. Through mTurk 100, respondents completed the survey and were
rewarded 50 cents upon completion. To qualify to take this survey, respondents had to be in the
United States and over the age of 18. A human check and random assignment of questions was
instituted to ensure attention was paid throughout completing the survey.
The survey included segmentation variables that were studied among the national sample.
Age, gender, location, education, frequency of usage for each service, average amount spent per
month, and types of goods/services purchased with Apple Pay/Google Pay were collected for
participant demographics. This categorical data was collected at the end of the study, to ensure
most attention was given to the questions determining consumer perceptions of each service, and
the importance of the various attributes. The age was asked on an ordinal scale of less than 20,
20-35, 36-40, 41-55, 56-70, and 71+. Gender was asked on a nominal scale of male, female, non-
binary, transgender, or prefer not to respond. The location of participants was addressed by state.
Income ranges were asked on ordinal scales, with intervals starting a $0, moving up with
$25,000 increments, and ending at $125,000+. This demographic information gave a greater
understanding of the consumers in the perceptual map and helped identify where Apple Pay can
improve perceptions of its service.
Results: Summary of most important findings:
After analyzing the data, it was found that consumers perceive Apple Pay/Google Pay as
being high in the attributes of convenience and contactless purchasing, with scores of 4.47 and
4.4 respectively (5). Consumers from the survey perceive this option as convenient and efficient
for contactless purchasing, but do not see the option as being as high in availability or security,
with a score of 4.36 for both (1,5). Examining the scores for the perceptions of each brand, Cash
App/Venmo/PayPal score the highest for availability, at 4.37. Apple Pay/Google Pay scores the
highest for contactless purchasing with a score of 4.4. Apple Pay/Google Pay scores the highest
for convenience with a score of 4.47. Lastly, Cash App/Venmo/PayPal scores the highest for
security with a score of 4.38(1,5). Initially, the perceptual map showed the attributes of security
and availability along dimension 1, with contactless purchasing and convenience along
dimension 2. The closeness of convenience and contactless purchasing means that consumers see
these attributes as similar. Security and availability are also positioned close to each other, but
further apart than convenience and contactless purchasing. Apple Pay/Google Pay’s positioning
placed it closer to convenience and contactless purchasing, demonstrating consumers saw Apple
Pay/Google Pay as a convenient service that was useful for contactless purchasing, but was not
as available or secure as a service like Cash App/Venmo/Paypal.
After using the elbow bend method for cluster analysis (3), it was determined that four
clusters were the appropriate number of segments to identify. However, Cluster 1 appears to
have provided inaccurate data. This segment was used to create a consumer persona, but the
results may be insignificant. Further analysis of this information would reduce the clusters to 3
and attempt to filter out Cluster 1’s results to improve the accuracy of the data.
Using these four customer segments, it was found that two customer segments (Segments
1 and 4) prefer to use Apple Pay/Google Pay when compared to the other payment options.
Segment 1 is composed of males, aged 20-35, with income between $50,001 and $75,000, with
their highest education level being a completed bachelor's degree, living in the East Coast. When
they use Apple Pay/Google Pay, it is for entertainment purchases, and on average, they spend
between $21 and $60. The most important attribute for this segment was contactless payment,
with a score of 4.0 but overall, their scores were low, indicating they did not care highly about
any attribute. This is once again attributed to the poor data collected (4).
Segment 4 is composed of males, ages 20-35, with income between $50,001-75,000, with
their highest education level being a completed bachelor’s degree, living in the Midwest. When
they use Apple Pay, it is for food, spending between $61 and $80. This segment’s most
important attribute is convenience with a score of 4.8, but this segment cared highly about all
attributes. When comparing the average perception scores for the attributes, and the average
cluster importance scores, Apply Pay/Google Pay was positioned closest to this segment (4).
Segment 2 is composed of females, aged 20-35, with income between $0 and $25,000
dollars, with their highest education level being a completed bachelor’s degree, living in the
Northeast. This segment uses Debit/Credit cards as their predominant payment method when
compared to the other three options. When they use Debit/Credit Cards, they spend between $21
and $60. The most important attribute to this segment is availability, with a score of 4.3 (4).
Segment 3 is composed of males, aged 20-35, with income between $25,000 and
$75,000, with their highest education level being a completed bachelor’s degree, living in the
East Coast. This segment uses Debit/Credit cards as their predominant payment method when
compared to the other three options. When they use their Debit/Credit card, they spend between
$61 and $80. The most important attribute to this segment was security, with a score of 4.9 (4).
 When consumer preferences were incorporated, Apple Pay’s positioning moved closer to
the clusters’ preferences on the perceptual map. After the incorporation of the cluster
preferences, a wider spread resulted between security and availability, and contactless
purchasing and convenience. Different clusters have wider preferences for the different
attributes, meaning the attributes are not as correlated as before. With consumer preferences,
Apple Pay/Google Pay is the rightmost data point and moves higher on dimension 1. The new
positioning places it closer to the convenience, contactless purchasing, and security attributes.
Apply Pay/Google Pay is positioned closest to Cluster 4, which ranks convenience (4.8) and
contactless purchasing (4.7) as its most important attribute. The results of the cluster analysis
explain that Apple Pay/Google Pay performs well on the cluster’s desired attributes. Initially,
consumers perceive the service as meeting their desire for contactless purchasing and
convenience, but Apple Pay/Google Pay’s performance is improved by moving closer to
multiple attributes.
Answer Research Questions:
To answer the segmentation question of, “out of the four variables that are characteristic
of each service examined, how many unique customer segments can be formed?”, four clusters
were created after using the “elbow bend method” in RStudio (3).
The second segmentation research question was, “out of the four variables that are
characteristic of each service examined, which variable does each cluster perceive as most
important to their payment options?”. The findings show that Cluster 1 perceives contactless
purchasing as their most important attribute, Cluster 2 perceives availability as their most
important attribute, Cluster 3 perceives security as their most important attribute, and Cluster 4
perceives convenience as their most important attribute (6).
The last research question asked: “when examining a perceptual map, where does Apple
Pay’s positioning lie in relation to each segments’ perceived preferences based on the attributes
used?”. To answer this question, the average perception score for each attribute for Apple
Pay/Google Pay was compared to each cluster’s average importance score for that attribute. To
compare availability scores, Apple Pay has an average perception score of 4.36 which places it
closest to Cluster 2’s average importance score of 4.28 and Cluster 4’s importance score of 4.54.
For contactless purchasing, Apple Pay has an average perception score of 4.40 which places it
closest to Cluster 4 with an average importance score of 4.70. The next closest cluster is Cluster
1 with an average importance score of 3.96. For convenience, Apple Pay’s average perceived
score is 4.47, which places it closest to Cluster 3, with its average importance score of 4.33.
Cluster 4 is the next closest with an average importance score of 4.75. Lastly, for security, Apple
Pay’s average perception score of 4.36 places it closest to Cluster 4 with its average importance
score of 4.12. The next closest is Cluster 1 with an average importance score of 3.93 (2,5,6,). These
results demonstrate which attributes Apple Pay is closest to regarding the perceived preferences.
Recommendations
The results above presented potential improvements for Apple Pay. First, Apple Pay
should work on improving their perceptions of security and availability as they are the lowest
performing attributes. To improve these perceptions, Apple Pay could run advertising campaigns
about its security to inform consumers. This includes comparing it with competing payments
services like virtual payments, cash, and cards. Apple Pay can run campaigns to publicize the
security systems they use and depict the value of not carrying a wallet, which may be stolen or
lost. Apple Pay can also emphasize Face ID encryption by demonstrating how when an
individual loses their phone, their mobile wallet cannot be accessed. These campaigns would
utilize the demographic information collected to target segments 1 and 4 based on their age,
location, and most important attributes. To increase the perceptions of availability, Apple Pay
could partner with more stores to increase the number of locations that accept the service. Large
chains, like Walmart, do not accept Apple Pay which contributes to the low perception of
availability. By partnering with more locations, Apple Pay could not only gain consumer
awareness, but increase the availability of the service, in turn increasing perceived availability.
Thus, these recommendations serve to increase Apple Pay’s perceived security and availability.
Another recommendation would be to move Apple Pay towards Cluster 4. To do this,
Apple Pay would work on the consumer perceptions of contactless purchasing and convenience
to consumers, as these are the attributes that Cluster 4 ranks as most important to them. This
could be solved through an advertising campaign, by showing consumers the diverse ways Apple
Pay can be used. To improve its contactless perception, it is recommended that Apple Pay
advertise in relation to changing usage habits due to the pandemic. Today, many consumers are
more conscious about the spread of germs. Apple Pay can play off this trend by advertising how
it is an effective form of contactless payment. From cluster analysis, it was determined that
Cluster 4 uses Apple Pay to purchase food, which has numerous touch points and places to
spread germs (6). Another piece of this campaign could focus on the increased usage of food
delivery services and apps, many of which accept Apple Pay as payment. Demonstrating the ease
of use in these apps could highlight the convenience of the service for this segment, which cares
heavily about this attribute. Thus, these recommendations serve to increase Apple Pay’s
positioning relative to Cluster 4 on the perceptual map (2).
Another recommendation would be to convert Clusters 2 and 3, which are Debit/Credit
card users, to Apple Pay users. Apple Pay can do this by examining the most important attributes
for the two clusters, and work to move the perceptions of their service closer to those important
attributes. For example, Cluster 2 values availability the most, while Cluster 3 values security.
By advertising the availability of Apple Pay, or creating more partnerships with big brands,
Apple Pay could work to increase the perceptions of availability, moving its perceptions closer to
the preferences of Cluster 2. Cluster 3 values security as their most important attribute in a
payment option. Therefore, Apple Pay could add more security features or increase the
messaging around the current security features to improve the perceptions of the services
security, bringing it closer to the clusters’ preferences.
Appendix

(1) PCA Biplot without Cluster Analysis

(2) PCA Biplot with Cluster Analysis

(3) Elbow Bend Plot for Cluster Analysis

(4) Cluster Analysis

(5) Perceptions of Brands

(6) Cluster preferences for Attributes

References
lam/Reuters, Stephen. (2022, August 23). Wait, when did everyone start using Apple pay? The
Wall Street Journal. Retrieved December 11, 2022, from
 https://www.wsj.com/articles/apple-pay-iphone-wallet-apps-
11660780139?st=d1ov8ih3wt5ul9c&reflink=desktopwebshare_permalink
Perez, S. (2021, April 5). Fueled by pandemic, contactless mobile payments to surpass half of all
smartphone users in US by 2025. TechCrunch. Retrieved December 11, 2022, from
https://techcrunch.com/2021/04/05/fueled-by-pandemic-contactless-mobile-payments-to-
surpass-half-of-all-smartphone-users-in-u-s-by-2025/
Webster, K. (2021, September 7). Seven years later, only 6% of people with iphones in the US
use Apple pay in-store when they can. 6% of People With iPhones Use Apple Pay In-Store
| PYMNTS.com. Retrieved December 11, 2022, from https://www.pymnts.com/apple-pay-
tracker/2021/7-years-later-6pct-people-with-iphones-in-us-use-apple-pay-in-store/