Apple Pay's following grows heading into holiday season

The Apple Pay wave continues to swell as more major retailers get behind the mobile payment technology.

Six new chains announced last week that they would accept Apple Pay, including BiLo Holding, Harvey's and Winn-Dixie, Albertson's and Jewel-Osco, Shaws and Star Markets, United Food Stores and Associated Food Stores. American First Credit Union announced its Visa card will also support the platform, while SunTrust and Regions Bank joined more than 500 other U.S. banks throwing their weight behind Apple Pay.

All in all it's been a banner month for Apple's payment system, with major chains like McDonald's reporting significant traffic for Apple Pay.

"Some merchants have seen a strong uptake of Apple Pay in just the first month," said Forrester Research analyst Denee Carrington. "As we enter the holiday shopping season we are likely to see that trend continue, but the big question is when and how quickly consumers begin to use Apple Pay in traditional retail stores."

Even with more shoppers willing to give the new technology a try this holiday season, what will keep this particular mobile payment languishing like earlier efforts will be incentives. As it stands, Apple Pay functions reliably as a stand-in for credit cards, but that's not enough to break shoppers' habits of reaching for their wallet instead of a phone at checkout.

Payment platforms might take a page from Starbucks' book, which uses customer data to offer free coffee on their birthday. For the sake of security, Apple Pay doesn't allow retailers to gather that kind of information, but it could prove useful, according to Peter Olynick, card and payments lead for Carlisle and Gallagher Consulting Group.

"The critical thing to make mobile wallets effective is that both the merchants and the consumer get something out of the deal above and beyond just a replacement for a card being swiped," he said. "The big thing Apple is marketing to date is enhanced security with Apple Pay, but I don't know if that's sustainable to keep people coming back again and again."

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