Apple Pay & Retailers

As is the case every year, Apple made a big announcement yesterday. No surprises there. But this year, there might be real reason for everyone, not just Apple fanboys, to pay attention.

And no, we’re not talking about the iPhone 6 and iPhone 6 Plus, although they have been hailed as “the best phones ever made” (albeit by an Apple senior vice president). We’re also not referencing the Apple Watch, even though we do find that to be much more compelling of a device than either of the new iPhones. If you didn’t guess it from the title of the article, we’re talking about Apple Pay.

What makes Apple Pay so special?

The naysayers would cry foul, claiming that there are already several similar payment solutions (Google Wallet for your NFC payment platform, Coin for your card consolidation device, and others). So what makes Apple Pay better than the first movers?
Well, for one thing, it’s Apple, which automatically gives it some widespread appeal and boosts the likelihood of a high rate of adoption. That, combined with the numerous partnerships that they’ve already announced, could result in actual implementation on a large scale, which hasn’t been done in any real way by competitors. On top of that, though, the fingerprint scanner on Apple’s latest iPhones allows for a literal one-touch payment when shopping in an app or on a mobile site, something that can’t be rivaled by any competing devices.

How might Apple Pay change retail as we know it?

  • Seamless payment will be more widely available. Previously, Amazon has dominated quick and easy payments with its patented one-click technology, keeping it out of the hands of other online retailers. With Apple Pay, though, near-instantaneous payment will be available to countless new retailers. If fully realized, this could completely streamline the checkout experience, whether in-store or online.
  • NFC POS systems will be more widely adopted. To quickly make sure we’re on the same page, NFC stands for “near field communication,” a technology that allows two devices to wirelessly communicate with each other when in close proximity (the new iPhones come equipped with the technology, as do countless Android, Windows, and — believe it or not — BlackBerry phones). And POS simply means point of sale, which is the place where the customer pays (think the register at checkout). Anyway, some retailers had already implemented NFC POS systems, but with a company like Apple releasing devices that utilize the technology, you can bet the ones who hadn’t yet adopted the technology will be thinking much harder about doing so.
  • Online retailers should see some benefits. As Apple Pay will compete with PayPal, Google Wallet, and others in the increasingly fragmented online payment solutions space, it would make sense that this competition will drive the various players to offer special deals, lower their transaction fees, and do whatever else it takes to retain users and ward off the invading giant that is Apple.

Will Apple Pay completely change the face of retail? It’ll certainly be interesting to find out.

Dave Haase
Dave Haase
Don't let his Stanford MBA fool you -- at heart, Dave's a real Indiana boy, and from time to time you can find him off-roading in his Jeep with his wife and kids. Feel free to email him with any questions related to eCommerce.