Well now…Apple did what we expected them to do. They have thrown their hat into the mobile payment ring. The question now is…what does it mean?
An overview of Apple Pay (in case you missed it)…
Apple has teamed up with credit card companies – Master Card, Visa, American Express and mass retailers like Macy’s, Bloomingdales, Walgreens, Staples, McDonalds, and Whole Foods to roll out the program.
Using Near Field Technology (NFC), consumer will be able to waive their phone (or new Apple Watch) over a reader and pay for items in-store using securely stored credit card information. Apple has made a point of saying that the credit card information will not be stored on the device and that Apple will not know what you are purchasing. Apple is seeking to make this new capability fit nicely into their OS by allowing consumers to add their credit cards directly through the Passbook function by simply taking a picture of the credit card.
What does it all mean? …
It seems for the consumer, this will make transactions very easy indeed. The real adoption question is for retailers. Will they want to invest in the hardware to enable mobile payments. The technology has been around for a while , so the readers are readily available and with a mandate to switch to a more secure chip form of transaction next year, many merchants will be getting new hardware anyway. This anticipated technological switch, in addition to a need to “keep up” with the large merchants already onboard, leads me to believe most large and mid-sized merchants will accept mobile payments by the end next year. I also believe that consumers will quickly adopt the transaction process – you see consumers holding their phones a lot more than their wallets- and wouldn’t we all like carrying fewer items in our wallets.
In summary, I believe Apple will overcome security concerns by promoting that the payment mechanism is more secure than carrying around cards and leaving receipts laying around. I also believe that the consumer is ready for the technology – we have these phones in our hands constantly. While terms have not been made public, it seems clear that Apple is going to make additional revenue off of this, retailers are going to offer a more friction-less experience, credit card companies are going to make more in transaction fees and the consumer is going to come to expect to buy whatever they want by simply pulling out their phone. Digital and commerce will in fact, continue to converge.
Digital BrandWorks is a digital consultancy solving commerce challenges for our clients
Joe Scartz is the President of Digital BrandWorks