Will Apple Pay revolutionize the way we do shopping?
Apple pay is not yet available in Switzerland, but here is everything you need to know – it may come soon!
The total mobile payment market, including in-store, in-app, and SMS payments was USD 392Bn in 2014, and will grow by 40% annually.
NFC (Near Field Communication) is a payment method used in some of the bank cards and mobile phones. It uses a chip to communicate with the POS terminal and does not require direct physical contact. Nowadays a lot of new smartphones are shipped with built-in NFC chips, while applications may contain the data of our bank cards, making the transactions possible.
However, in the US only 7% of Android users tried NFC payment through Google Wallet (to be renamed Android Pay), while Apple had resisted implementing the technology to its devices until recently.
What is Apple Pay?
Apple Pay is the NFC solution launched in September 2014, built in iPhone 6 smartphones, iPad Air 2, iPad mini 3, and Apple Watch – simply put, you can pay with your mobile in a retail store using your mobile device.
Even though most people associate Apple Pay with payment at brick-and-mortar retailers, there is also a version for m-commerce payments, that are now handled via Paypal and credit card payments. Apple Pay has some specifics compared to rival methods:
- Integration: Apple Pay is integrated with the app Wallet (just renamed from Passbook), containing all of the user’s bank card data, as well as iCloud
- Ease of use: In the US the majority of people find remembering PINs difficult while they still trust in magnetic cards and classic signatures. Apple Pay makes the transaction easy, using the fingerprint as identification. The same method can be used when paying in an application: you don’t need digging up a bank card or remember login data as in other paying solutions: your fingerprint will do. (Depending on the app it might be required to allow Apple Pay or set it up as your default way of payment.)
- Security: Apple Pay-ready gadgets contain the “Secure Element”, a chip encoding the transaction. Also, it is visibly more secure than the easily forgeable signature or the bank card numbers that might be copied when put on display. Lost iPhones can be suspended, while Apple Watches ask for a code every time they were removed from the wrist.
Where is it accepted?
Apple has contracts with all major banks in the US and Apple Pay is accepted at 1 million points of sale in the country, including long-hesitant Best Buy and Target. From another perspective, less than a quarter of the National Retail Federation’s list of the top 100 US retailers are now accepting Apple Pay. The main reason is the opposition from the Merchant Customer Exchange (MCX), who is trialing with the 2015 launch of a competing system called CurrentC.
As in-app payment it is accepted by many major featured and branded iOS apps, such as Airbnb, Uber, Groupon, Etsy, Pinterest, Instacard, Kickstarter, Sephora, Starbucks, Target, Disney Store…
When it will come to us?
It’s been announced on Apple’s Worldwide Developer Conference 2015 that Apple Pay will be launched first in the UK in July 2015, with 250,000 vendors accepting it at the start. Further moves are still unknown, however some rumors say that the next markets would be Canada, and maybe China. Other key markets for mobile payment in the future are predicted to be India, Japan, and South Korea, followed by Europe.
What to do if I’m a retailer?
Once Apple Pay is introduced in the country, it usually works with Visa’s PayWave, MasterCard’s PayPass, and American Express’s ExpressPay terminals; you just have to contact your payment provider to start accepting Apple Pay. For small businesses a renewed version of the Square NFC reader will be available later this year. The payment mark can be downloaded from Apple’s site, and Apple Pay decals can be ordered to put on your storefront window and register.
If you have an application and want to integrate Apple Pay, you might contact one of Apple’s contracted solution providers in your country, and check out Apple Developer for guides and reference how to incorporate the technology in your app.
Whether Apple Pay will be a success is still unknown. To date, about one quarter of iPhone owners in the US use Wallet, while some 13% of iPhone 6 users already tried Apple Pay and a further 11% are planning to do so. Only 2% of them say they don’t trust in mobile payment services. The Apple ecosystem might have the potential to break through the burden of NFC usage that other service providers including Google and the large card companies could not really break to date.