Apple Pay, which launched in October 2014, reached 11 per cent of US credit card households in its first four months but growth has since slowed considerably, according to US market research firm Phoenix Marketing International.

By September 2015, Apple Pay’s penetration of US credit card households had crept up to 14 per cent, reflecting how interest has dropped off this year.

Phoenix’s director of card performance research, Greg Weed, shared the research during a presentation at the Money 2020 conference in Las Vegas.

Consumer segments display different adoption profiles, said Weed, citing a surge in so-called Generation X adoption even as the overall market began to flatten.

The percentage of US card households classified as Gen-X using Apple Pay stands at 23 per cent (September 2015). Apple Pay is most popular among Millennials (18-32 years old) with a 26 per cent US household penetration. Together these two groups account for 92 per cent of total adoption.

Phoenix has been researching Apple Pay since its debut with a group of 15,000 consumers.

Pre-launch demand for the payment service was successfully captured early after launch as the first tier of adopters willingly replaced contactless cards with their Apple devices, said Weed.

Some of these adopters see Apple Pay as convenient and secure. However, the second tier of adopters are unconvinced, remaining happy with plastic cards. As the market has grown, friction against adoption has remained, not lessened, said the report.

Friction points include finding stores that do not accept Apple Pay, as well as point-of-sale terminals not enabled for the payment service, or are too slow at handling transactions. Cashiers lacking knowledge of Apple Pay is another problem. Users are also confused about where to go for customer support, in the case of an error such as double charging.  “Ultimately, Apple and its partners have to be ready to handle issues regarding customer support,” the report concludes.