Apple Pay is the talk of the town and, evidently, the future of payments. But when will it become ubiquitous?
Apple has re-branded Passbook and is adding new features in hopes of one day replacing people's wallets. If it proves a success this time round, Apple Pay and Wallet will be a permanent fixture in the pockets of every consumer and installed in businesses around the world. That's a huge jump from where we are now, so when will it actually happen?
The convenience culture is the major driving force behind the cashless revolution. From apps that deliver food in under 15 minutes to one-click shopping on Amazon, "quick and easy" is winning the war. Looking ahead, today's hyper-involoved payment process (e.g. pennies are still a thing) will ultimately be simplified by mobile devices. So, let’s take a look at:
The future for Apple Pay
Current gaps and issues with the technology
The Future of "Where Can I Use Apple Pay"
Imagine a day where you simply tap your phone to the card reader and that’s it. You’ve paid, earned your rewards, and received your receipt, all in one tap. No need for cash, bank cards or anything else you hoard in your wallet. That’s the Apple dream (although the current reality is not quite as envisioned) and Wallet replacing Passbook is meant to revolutionize large-scale, frictionless, and safe.
Consider that the way we pay has drastically changed in the past ten years, as cash is no longer the primary mode of payment. Plastic cards account for 66% of all in person sales – a figure only expected to rise. Today, a new payment revolution is upon us – with both cash and plastic set to become obsolete in the future. Apple believes it can once again (hello iPads) lead the way in innovating how we live our day-to-day lives.
Nick Webb - Flickr, Creative CommonsWhere can I use Apple Pay, today?
As of next month, Apple expects to surpass 1 million locations where Apple Pay will be accepted. The initial take up on first launch was slow, so this time round Apple is furthering reach in in an attempt to attract more merchants and consumers alike. Apple will now allow consumers to link store cards from the likes of JC Penney’s and Kohl’s, alongside adding loyalty cards from Walgreens and Dunkin Donuts (to name a few).Easy to use
Getting rid of loyalty cards and plastic bank cards sounds compelling, right? Perfect, Apple will use this as a hook to get more consumers on board with Apple Pay. As is always the case with Apple, the company has designed a product with the consumer in mind.
Apple Pay and Wallet exist to make the process of purchasing as simple as possible for the customer. If people find signing up for a new technology too difficult (or in any way cumbersome), they simply won’t bother. After all, paying with your bank card is not all that difficult, so why should people change a habit of a lifetime? Apple had to focus on ease of use.Protection against fraud
Apple has made it a point to use a process called "tokenization" for linking bank cards (tokenization explained). Apple doesn't know any of consumers' card details, nor is this information stored anywhere. Apple doesn’t know who bought an item, where they bought it, or when. Apple is increasingly lowering the risk of fraud (and getting paid for it).
The more consumers on board, the more merchants will want to (or feel the need to) get on board too. Apple is committed to shifting consumer behavior from leather wallets to iPhones. Apple intends to be as instrumental to consumers' lives as breathing, and plans on getting there through our pockets. But this second attempt at Passbook has some issues are currently hindering and slowing down the process.
The Gaps and Issues Preventing "Where Can I Use Apple Pay?" From Going Mainstream
Are you a merchant or consumer who has yet to get on the Apple Pay train? You’re not alone. The need to purchases contact-less terminals, upgrade point of sale systems, still incur 2-3% transaction fees from credit card companies, and training employees are huge issues. But, bigger than that, Apple Pay does not give businesses any consumer information.Lack of loyalty
As I mentioned earlier, It’s a selling point of Apple Pay that the technology does not know who bought the goods, where they bought them or how much they paid. BUT – we live in a time built on data. The more you can know about your customers' behaviors, the better you can serve them. Apple's new technology does not address the issue of lack of information or data blindness for brick-and-mortar businesses.
Apple Pay is missing the one thing retailers crave – customer analytics! Thus the importance of a loyalty program, which can capture consumer purchase (and non-purchase) activity through a separate unique identifier. Apple Pay can provide security, while an integrated rewards program generates the data insights. The two have to work in tandem.No one else is doing it
Then there’s the problem of supply and demand. “Where can I use Apple Pay?” is heard all too often for a technology hoped to be synonymous with life. How many stores accept it and how many consumers use it? The technology still needs a tipping point.
“Only 220,000 stores will work with Apple Pay initially. That’s about 2.4% of the roughly 7 million to 9 million merchants in the U.S. that accept credit cards. The remaining 97.6% of businesses do not have point-of-sale systems that work with near-field communication (NFC), the technology Apple Pay relies on. Merchants will have to upgrade their checkout process for Apple’s service to catch on, and the expense of such an endeavor has—thus far—left many businesses reluctant to do so.” - Jacob Davidson
Because Apple Pay doesn’t solve the biggest problem retailers face, it’s having a slow take up from consumers and merchants. While all the statistics and trends point towards this method of payment becoming the norm, it won't happen overnight. Data needs to be a piece of the puzzle (without upsetting a seamless consumer payment).
What does this mean for me?
It is important to give you and your business the best opportunity to succeed. There is no harm in adopting Apple Pay, but it should not be a sole focus. It’s vital to stay current and ensure you are looking after your best customers. Apple Pay makes sense as a way to make your customers' lives easier. But you need the right technology to fill in the rest of the data gaps before expecting any success.