Since it’s not launching here just yet, there is time to consider whether it’s a worthwhile investment for your small business to make. Will making a transaction via Apple Pay be the norm in a couple of years, or will it be just another short lived fad, marred by technical issues and security concerns? Here are a few things to consider:
Apple Pay Explained
Mobile contactless payments have been around for a number of years now (Google Wallet launched in 2011), but their uptake has been slow due in equal part to technophobia and security concerns. Apple Pay is simply Apple’s answer to paying at the till without cash or card.
Currently only available with the iPhone 6 and iPhone 6 Plus, Apple Pay uses NFC (near field communication) technology to securely transmit the credit or debit card details of a user from the Passbook app on their phone. Just hold your phone to the card reader, with your finger on the TouchID sensor, and if you have a recognised fingerprint, payment is made.
How Is Apple Pay Different From Current Technologies?
On the surface, it really isn’t that different at all. It uses the same technology as all mobile and contactless payment systems. But, because this is Apple we’re talking about, they appear to have streamlined the process and made a better overall user experience, which theoretically should encourage more widespread adoption.
But perhaps the biggest ‘difference’ being promoted is the security features of the new payment system. As well as fingerprint recognition technology on the TouchID sensor, required to authorise transactions, Apple Pay encrypts data at an extremely complex level, preventing hackers or fraudsters from accessing any kind of information about the transaction. No data is stored with the retailer or by Apple, as payment tokens are issued instead, direct to the bank.
It might sound complicated, but it’s had widespread support amongst banks in the US, indicating that the security is apparently ‘solid’.
Why Should Businesses Consider Apple Pay?
• There’s no denying Apple products are popular.
500 million iPhone purchases to date attest to that. Apple might not invent new technologies, but they set the trend with mp3’s, mobile phones, and tablets, so why not with mobile payments? If they do encourage widespread adoption, Apple Pay will have strong hold on the market. With so many iPhones in circulation, it’d be foolhardy not to offer Apple Pay as a payment method to your customers.
• Contactless payments are undoubtedly increasing.
There are now more than 40 million contactless payment cards in circulation in the UK, and Visa recently predicted over 500 million UK contactless transactions in 2015. People are adopting the technology, and if Apple Pay turns out as efficient as its creators claim, expect take up of the system to be extremely widespread.
• It sounds typically Apple – smooth and simple.
Like a lot of their products, Apple Pay sounds like it could make paying at the till incredibly smooth and easy. No cards, no cash, just one touch. Integrated with your Apple account (meaning your credit card details are likely already on file), your iPhone could become all you need for shopping online, in store and for in app purchases.
• It sets your business apart, and makes sense if you’re upgrading.
Having a system like Apple Pay in place could set your small business apart from competitors, especially as customers come to expect this kind of system. Plus, since all vendors must ensure their card readers and POS equipment contains a secure EMV chip by October 2015, it makes sense to upgrade now.
What Are The Downsides of Apple Pay?
• Unknown costs.
If you are faced with a need to upgrade or change your POS technology and hardware, costs could quickly mount. And whilst there are currently no processing fees for vendors, this may change in future.
• Limitations.
In the UK, contactless payments are currently limited to £20 or under. If most of your transactions as a small business are above this, it’s not worth investing in Apple Pay. And whilst their may be a plethora of iPhones on the market, Apple Pay is only available in the latest models, the iPhone 6 and 6 Plus.
• It might not work.
Apple isn’t bulletproof, and previous services they’ve offered have flopped. The last thing you want to do is spend all the time and money preparing to accept Apple Pay, only to find that customers don’t want to use it. Things could break, or, worst case scenario, security is compromised.
Adoption is key. If users in the US try out Apple Pay and it holds up to customer testing, then it could mark the change in how we pay for products and services. If it does bring about widespread adoption of mobile contactless technology, it’s Apple that will rule the roost.
In that scenario, if you offer any kind of transactions in store, it’d be wise to accept Apple Pay in your small business. See how the US market reacts to the system before you make your decision though.
Since it’s not launching here just yet, there is time to consider whether it’s a worthwhile investment for your small business to make. Will making a transaction via Apple Pay be the norm in a couple of years, or will it be just another short lived fad, marred by technical issues and security concerns? Here are a few things to consider:
Apple Pay Explained
Mobile contactless payments have been around for a number of years now (Google Wallet launched in 2011), but their uptake has been slow due in equal part to technophobia and security concerns. Apple Pay is simply Apple’s answer to paying at the till without cash or card.
Currently only available with the iPhone 6 and iPhone 6 Plus, Apple Pay uses NFC (near field communication) technology to securely transmit the credit or debit card details of a user from the Passbook app on their phone. Just hold your phone to the card reader, with your finger on the TouchID sensor, and if you have a recognised fingerprint, payment is made.
How Is Apple Pay Different From Current Technologies?
On the surface, it really isn’t that different at all. It uses the same technology as all mobile and contactless payment systems. But, because this is Apple we’re talking about, they appear to have streamlined the process and made a better overall user experience, which theoretically should encourage more widespread adoption.
But perhaps the biggest ‘difference’ being promoted is the security features of the new payment system. As well as fingerprint recognition technology on the TouchID sensor, required to authorise transactions, Apple Pay encrypts data at an extremely complex level, preventing hackers or fraudsters from accessing any kind of information about the transaction. No data is stored with the retailer or by Apple, as payment tokens are issued instead, direct to the bank.
It might sound complicated, but it’s had widespread support amongst banks in the US, indicating that the security is apparently ‘solid’.
Why Should Businesses Consider Apple Pay?
• There’s no denying Apple products are popular.
500 million iPhone purchases to date attest to that. Apple might not invent new technologies, but they set the trend with mp3’s, mobile phones, and tablets, so why not with mobile payments? If they do encourage widespread adoption, Apple Pay will have strong hold on the market. With so many iPhones in circulation, it’d be foolhardy not to offer Apple Pay as a payment method to your customers.
• Contactless payments are undoubtedly increasing.
There are now more than 40 million contactless payment cards in circulation in the UK, and Visa recently predicted over 500 million UK contactless transactions in 2015. People are adopting the technology, and if Apple Pay turns out as efficient as its creators claim, expect take up of the system to be extremely widespread.
• It sounds typically Apple – smooth and simple.
Like a lot of their products, Apple Pay sounds like it could make paying at the till incredibly smooth and easy. No cards, no cash, just one touch. Integrated with your Apple account (meaning your credit card details are likely already on file), your iPhone could become all you need for shopping online, in store and for in app purchases.
• It sets your business apart, and makes sense if you’re upgrading.
Having a system like Apple Pay in place could set your small business apart from competitors, especially as customers come to expect this kind of system. Plus, since all vendors must ensure their card readers and POS equipment contains a secure EMV chip by October 2015, it makes sense to upgrade now.
What Are The Downsides of Apple Pay?
• Unknown costs.
If you are faced with a need to upgrade or change your POS technology and hardware, costs could quickly mount. And whilst there are currently no processing fees for vendors, this may change in future.
• Limitations.
In the UK, contactless payments are currently limited to £20 or under. If most of your transactions as a small business are above this, it’s not worth investing in Apple Pay. And whilst their may be a plethora of iPhones on the market, Apple Pay is only available in the latest models, the iPhone 6 and 6 Plus.
• It might not work.
Apple isn’t bulletproof, and previous services they’ve offered have flopped. The last thing you want to do is spend all the time and money preparing to accept Apple Pay, only to find that customers don’t want to use it. Things could break, or, worst case scenario, security is compromised.
Adoption is key. If users in the US try out Apple Pay and it holds up to customer testing, then it could mark the change in how we pay for products and services. If it does bring about widespread adoption of mobile contactless technology, it’s Apple that will rule the roost.
In that scenario, if you offer any kind of transactions in store, it’d be wise to accept Apple Pay in your small business. See how the US market reacts to the system before you make your decision though.
Nick Pinson is the director of iWeb Solutions ecommerce website designers, based in Staffordshire.
Image: 1000 Words / Shutterstock.com
