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Munster: Apple Pay distribution low, but peer-to-peer and in-browser payments to goose adoption in 2016

Fresh data from investment firm Piper Jaffray shows Apple Pay adoption hovering between 10 and 20 percent, but analyst Gene Munster expects numbers to rise in 2016 as Apple integrates attractive new features like peer-to-peer payments and in-browser integration.

According to the latest statistics from Piper Jaffray's Apple Pay adoption tracker, uptake among U.S. iPhone users is relatively low, but the system is "overwhelmingly the share leader" in point-of-sale mobile payments, Munster said in a note to investors on Thursday.

Munster notes Apple Pay bank partnerships are accelerating, jumping from 515 supporting banks in September to 930 as of today. A provided chart shows the number of U.S. banks accepting Apple's service has roughly doubled every three months since March 2015, with most of that growth originating from U.S. institutions. Apple's rolling list of service partners, which added 58 new U.S. card issuers earlier this month, backs up Munster's data.

While not growing at the same pace, the number of apps supporting Apple Pay in-app payments adoption is also increasing and now sits at 131 titles. In June 2015, Munster modeled 50 apps as accepting Apple Pay, which rose to 70 apps in September. Large retailers are also slow to adopt, reaching 98 named stores this month, including 27 that have pledged forthcoming support. The number of retailers that actually accept Apple Pay is unknown, however, as smaller outlets and local establishments are not counted. Munster estimates Apple Pay is available at more than one million POS locations in the U.S.

Looking ahead, the analyst believes Apple will introduce new features like peer-to-peer and in-browser payments later this year. A report in November said Apple has already discussed a potential P2P rollout with major banks like J.P. Morgan Chase, Capital One, Wells Fargo and U.S. Bancorp, though no evidence has surfaced to support such claims.

"While 2015 was the year of Apple Pay adoption at banks, retailers and in-app, we believe 2016 will be the year of new features for Apple Pay," Munster said. "We believe peer-to-peer will be an important feature to increase overall consumer usage and awareness of Apple Pay and see mobile in-browser payments as a significant addition to the Apple Pay addressable market."

Apple has yet to make an official move toward P2P, a market controlled by established service options from PayPal and Square. If and when the company decides to throw its hat into the ring, Apple Pay P2P will have instant access to a massive installed user base that could catalyze wider adoption.