Apple Pay Fast Tracks Mobile Payments

category: Tech essentials

sectors: Payment

Why does it always seem like Apple needs to be involved for a technology or movement to take off? Mobile payments weren’t new before Apple unveiled Apple Pay, but here we are talking about a disruptive payment technology that is going to revolutionise mobile payments. Seems like every time you scroll through Twitter or browse the web a new survey or report pops up claiming that ‘contactless mobile payments are on the rise’ or ‘consumers adopting to mobile payments.’ so, what makes Apple Pay so great?

Apple Pay is a mobile POS service that enables users to pay for purchases with compatible iPhones or Apple Watch. Users link credit cards from iTunes to their devices, which are then synced to PassBook and ready for purchasing. Making it all possible is the not-so-new, near-field communication (NFC) technology, which has been built into these devices – NFC allows the iPhone to communicate with a contactless reader at a POS terminal when held in close proximity.

Recent credit card and identity breaches have given way to a new appreciation for security and privacy measures. Thus, Apple requires customers to simultaneously use Touch ID to authorise and process every transaction. Additionally, a unique Device Account Number is assigned, encrypted, and securely stored in a users iPhone – never on Apple servers. So when a user makes a purchase, instead of sharing card information with a merchant, only the assigned Device Account Number and transaction-specific dynamic security code are made visible.

Google fan boys will say that Google Wallet has been doing the same things since 2011, and they’d be right, but it has also been largely underutilised. In the same way that Apple propelled MP3s into the mainstream with the iPod, Apple Pay can have the same affect on POS and mobile payments. According to IDC FutureScape’s 2015 Retail Predictions, by 2018, 60 percent of retailers will launch mobile payment initiatives to enhance existing ecommerce, loyalty, and in-store mobile POS investments. Many could equate these projections to our tech-savvy and millennial-driven culture, but you can’t overlook Apple as a real, potential factor behind those numbers.

Among the 220,000 stores that have partnered with Apple are household names like Bloomingdales, Macy’s, McDonald’s, Petco, Panera Bread, Walgreens and Whole Foods, to name a few. But it isn’t limited to just large retailers, companies like Revel (a provider of iPad POS solutions), have started rolling out new mobile solutions that support Apple Pay for their SMB customers.

Early adoption for many businesses can be the difference between increasing and finding new revenue streams, or missing the boat entirely. Tech-savvy customers will want to use their mobile devices at POS, while users would prefer trusting the security of Apple Pay over handing a cashier their credit or debit card to make a purchase.

While small business retailers can’t compete on the same scale as larger companies, they can adopt new technologies more quickly and integrate more seamlessly to serve these customers. Inherently, there will be a learning curve for both the businesses and consumers, but that far surpasses the consequences of not future proofing operations.

The hospitality and retail industries have an massive opportunity to capitalise on Apple Pay – the days of considering mobile payments a what-if technology for POS are numbered, it’s time to be advantageous and understand the opportunities that lie ahead.