After a successful role out across the States towards the end of 2014, Apple Pay launched in the UK in July 2015, but how is it going to effect online retailers? Before we get to that what is Apple Pay exactly?
In short, Apple Pay is Apple’s mobile payment service for online and in-store retailers. Big named brands such as, McDonald’s, Nike, Groupon and Uber are all using Apple Pay and were partners of the Apple Pay launch.
The latest iPhone, iWatch and iPad models will have the Apple Pay software embedded and these devices will allow consumers to pay through the Touch ID interface using their fingerprint. The iPhone 6 and iWatch also include a near-field communication (NFC) chip which allows shoppers to pay using Apple Pay whilst in store by simply holding their device (iPhone6 or iWatch) against the reader. The customer will feel a gentle pulse and hear a tone, this means payment has been taken.
It’s no puzzle as to why Apple have launched their own payment method, if you take a look into the smart phone market you can see that Apple devices share the global majority with 49.7% being iPhones and 81.6% iPad models*. There is a real chance that Apple could soon dominate the mobile payments world, but how will this affect online retailers?
We all know it, you get to an online checkout and you have to get up off the sofa to find your bank card to fill out the cards details in order to complete your transaction. For the consumer, paying there and then with one touch of your fingerprint offers convenience, speed and tighter security. For retailers and marketers this eradicates the need to optimise conversion at each step of the consumer checkout process.
Online retailers have a variety of choice when it comes to accepting payment with the likes of Paypal, Amazon Payments and now Apple Pay. The competition is fierce which bodes well for retailers as they may be able to reap the benefits of decreased fees, improving their overall profit margins. Apple Pay’s Touch ID led the way to its lower (“Credit Card Present”) processing fees, these savings could be passed down to retailers who in turn may choose to pass some of the savings on to consumers.
Going forward, Apple may be able to build their relations with retailers by offering deals and marketing promotions through Apple Pay.
Most of us are happy for the likes of Boots, Waitrose, Nectar and Amazon collecting information on what we are buying, so why have Apple made the assumption people would be opposed to this? Apple stated that they will not be keeping any transaction data in their database, it will only go to the retailer. Apple may have missed a trick here by not tracking consumer’s purchases, it will be interesting to see if this will change further down the line!
*Source: The Custora E-Commerce Pulse, figures from Sept 2014.