Apple Pay: The Way of the Future?
Apple Pay launched last month and it’s been turning many retailers’ worlds upside down. Here is everything you need to know.
Our good friends at Apple don’t want to just take your money for a new iPhone. They want to take your money for whatever else you want to buy, too! With the late 2014 launch of Apple Pay, Apple now offers businesses the ability to accept payments from shoppers with one touch of their iPhone.
How Apple Pay Works…
Consumers can connect their credit or debit card to their iPhone and then use it to pay for merchandise in store. Once signed up, consumers can use Apple Pay at any participating retailer, simply by holding their iPhone near a patented, contactless reader installed by the retailer—all with no wallet to fumble through and no app to open. According to Apple, “You don’t even have to look at the screen to know your payment information was successfully sent. A subtle vibration and beep let you know.” You can watch a demo from Apple to see it in action.
Which Merchants are Using Apple Pay?
Right now Apple Pay is accepted at more than 220,000 stores worldwide. The majority of those are larger chain stores like Macy’s, Staples and Nike; grocery and convenience stores like Wholefoods, Walgreens and Meijer; and quick serve restaurants like Panera Bread, Subway and McDonald’s. But the list continues to grow andaccording to digitaltrends.com, “dozens more clothing stores, restaurants, and otherretailers are signing up….Even [their] local Foodtown grocery store in Queens, NY has signs posted at every register, announcing support for Apple Pay.”
Are Merchants Loving Apple Pay?
The initial feedback from larger merchants is that they like offering their customers the ease of paying with Apple Pay. Retailers and shoppers alike see mobile payments as a natural progression in payment technology. However, according to the Wall Street Journal, “Smaller merchants in particular were reluctant to install the systems—which can cost $300 to $500 per device—because few consumers were using them.” While we know consumer adoption is on the rise, there is the additional concern that merchant fees for Apple Pay, and other similar systems, are higher than regular credit card fees.
Additionally, Apply Pay is blocking the ability for merchants to identify customers using it, which has essentially cut off the incentive for merchants to use the Apple Pay platform as a loyalty program. To learn more about this, check out the Pymnts.com article “Why Apple Pay Needs Merchants More than Merchants Need Apple Pay”.
Future Projections For Apple Pay
So right now, there’s a bit of a Catch-22 between merchants waiting for real user demand for Apple Pay, and shoppers waiting for more merchants to sign up before they do. That said, Pymnt.com reminds us that, “The total universe of Apple Pay consumers will only ever be Apple consumers” since you have to have an iPhone6 to use it. That means that we can expect the adoption rate to be slow among smaller retailers and shoppers alike.
And while mobile payments are a slow moving train—and Apple Pay may not be the final driver due to its limitations (you have to have an iPhone to use it)—it is still a train. Expect to see more fanfare surrounding mobile payments in the near future and to someday accept them as readily as you do a credit card today.
Do you accept Apple Pay in your store? Do you use it when shopping yourself? We’d love to hear about your thoughts or experiences with mobile payments in the comments section below.