Apple (NASDAQ:AAPL) recently said some 4 million locations, or about 35% of all retail stores in the U.S., accept its Apple Pay mobile payment option. Although there are some notable exceptions among the largest retailers, such as Wal-Mart and Target, who don't offer it, others like Gap do, or soon will feature the payment solution.

Because it's available on mobile phones, tablets, and even the Apple Watch, its ubiquity and relative ease of use make it the go-to choice for consumers on the go as well as those dissatisfied with the hassle and delays of embedded chip cards. According to data analytics firm TXN Solutions, which surveyed the transactions from over 3 million payment cards, Apple Pay usage has soared by 50% over the past year.

Using Apple Pay to order online

Image source: Apple.

The rise of Apple Pay

Indeed, during Apple's first-quarter earnings conference call with analysts last month, CEO Tim Cook said transaction volume had risen sixfold from the prior year as Apple Pay expanded into four new countries, including Japan, Russia, New Zealand, and Spain.

While that would seem to clash somewhat with TXN's more muted (though still significant) rise, it comes down to a difference in what's being measured. While Apple isn't particularly forthcoming on details of the Apple Pay ecosystem, it is talking about the actual number of transactions made, while the data analytics firm is referencing the percentage of transactions from its panel of consumers who provide their credit and debit card data and whose banks distinguish Apple Pay transactions.

While that naturally limits the universe of transactions captured, over time it still tracks the acceptance of the mobile payment option and its growth, and what it found was that most people were using it in mobile apps and on websites.

A place to crash for the night

That surprising conclusion was reached after finding that of all the places Apple Pay users were using the payment option, getting a cheap hotel room at the last minute topped the list. Ordering takeout was apparently the second favorite way to use the service. 

Booking a room on HotelTonight via mobile app

Image source: HotelTonight.

The TXN data, which examined payments made between December 2015 and December 2016, found mobile travel app HotelTonight, a last-minute reservation service, had 3.4% of all its credit cards transactions made with Apple Pay, followed by food delivery services Caviar, Postmates, and DoorDash, which all had around 2.5% usage rates or slightly higher. 

What is more notable about the survey results is that despite the broad proliferation of places accepting Apple Pay as an option, it really hasn't caught on among brick-and-mortar retailers, where most places saw it represent less than 1% of all credit card transactions. And ultimately, regardless of where it is used, it isn't creating much of a stir in the payments industry, as it represents just a small percentage of total credit card transactions.  

But let's first cross off the names of stores where people aren't using Apple Pay.

Starbucks' mobile ordering trumps Apple pay

At the bottom of the list is Starbucks (NASDAQ:SBUX), which came in last on a list of the 13 top places processing Apple Pay transactions, accounting for about 0.5% of the coffee shop's total credit card transactions. Considering Starbucks has its own highly regarded mobile ordering and payment option, which is often looked at as the gold standard for convenience and ease of use, it raises eyebrows that people are using Apple Pay there at all.

On its first-quarter earnings conference call with analysts two weeks ago, Starbucks President Kevin Johnson said, "Mobile Order & Pay had a banner quarter, representing more than 7% of total transactions, double the figure from Q1 last year, and we now have nearly 1,200 stores with 20% or more Mobile Order & Pay transactions at peak, compared to only 13 stores one year ago." When you have customer loyalty like that, who needs Apple Pay?

Starbucks mobile order and pay app

Image source: Starbucks.

Food retailers still represent the lion's share of places seeing Apple Pay usage, and Lowes Foods, Sprouts Farmers Markets, Panera Bread, and Schnucks round out the bottom five places for users of the mobile wallet, with around 0.6% of their credit card transactions accounted for using the payment method.

A prescription for future growth?

So, if Starbucks and trendy grocery stores were bringing up the rear, who was it that was leading the brick-and-mortar pack? Would you believe Duane Reade, the New York metropolitan area drugstore chain owned by Walgreens Boots Alliance (NASDAQ:WBA)?

According to the TXN data, the pharmacy operator was the top spot where people used Apple Pay, with 1.8% of the credit card transactions identifying the mobile payment option being chosen. That put it slightly ahead of No. 2 retailer Whole Foods Market (Nasdaq: WFM), which had about 1.7% of its credit card transactions using Apple Pay.

Because both retailers have been with the service since Apple launched Apple Pay in 2014, it might not be so surprising they were well ahead of the others, including Canteen Vending at No. 3 with slightly less than 1% of its transactions, and fourth place Peet's Coffee with just under 0.8%.

Whether that means Apple Pay will ever supplant EMV cards as a preferred payment option remains to be seen, but it seems hard to believe it will replace Starbucks' mobile order and pay app anytime soon. And though Apple Pay users seem to be a rare breed indeed, maybe all you need to see them in action is to simply stop by your local pharmacy.