Apple Pay was announced back in September, along with the iPhone 6 and iPhone 6 Plus. Last week this contactless payment system went live with iOS 8.1 update. Apple reported an astounding number of registered credit cards in the first hours: users registered over one million credit cards in just 72 hours. Bear in mind that this is an additional one million credit cards, on top of those that are linked to the 800 million existing iTunes accounts. This may be a positive hint that Pay might succeed where so many others have failed (remember Google Wallet anyone)? Let us take a look at what Apple Pay exactly is and what it can mean for your business.
What is Apple Pay?
Apple states: “Apple Pay provides an easy and secure way for users to buy physical goods and services in your app.”. The newer Apple devices, such as the iPhone 6 and 6 Plus, can now communicate wirelessly with point of sale systems using NFC (Near Field Communication).
You start by linking your credit card, either via iTunes or by taking a picture of it. All the credit card information gets stored in a separate, secured, probably encrypted chip, dubbed the “Secure Element”. If you ever want to access the information on the chip you need to prove your identity by holding your fingerprints on the Touch ID sensor. This should prevent further disaster when your phone gets stolen.
Paying is very easy: just hold your device close to the point of sale system, press your finger on the sensor and you just bought something. Obviously this will only work with the newer devices (iPhone 6 or 6 Plus) since the older devices do not have a NFC chip. Older devices can use Apple’s watch (expected in early 2015) to pay via Pay. It can be used to pay for physical goods, services (membership fees, tickets etc.) and in-app purchases.
Opportunities in Apple Pay
Apple Pay stays in the United States, for now at least. It is safe to assume that it wil arrive in Europe at some point next year. The first opportunity in Apple Pay is for the banks: actively supporting Pay can be a way to establish an image as innovative and revolutionary bank. Furthermore Apple Pay can be considered safe: it uses two factor authentication by default: you must have your own device to pay and you must scan your own finger print. A stolen device does not result in fraudulent transactions, whereas a stolen credit card or even credit card details can be quite problematic.
The easiness of Apple Pay will increase the adoption of in-app purchases. Marketers can engage the full arsenal of Apple technologies to get a more direct interaction with their customers. Passbook can be used to store loyalty cards, iBeacons can be used to trigger a targeted advertisement when the user enters the store and of course Apple Pay is used to seal the deal. Customer information, location and easy payment all bundled in a single platform can create a marketing dream.
A little example: as a proper mobile expert I enjoy a good coffee every now and then, mostly at 10 in the morning and at 2 in the afternoon. A coffee shop could learn my coffee patterns by using a Passbook loyalty card (and the “what’s in it for me” is that I get free coffee from time to time). They would know my favourite flavour of coffee (with quite a lot of milk actually). Now imagine me rushing to the train at around 2 in Brussels as I pass by that certain coffee shop. The app detects the iBeacon installed in the shop and presents me with a popup “Need a coffee for on the train? Get your favourite for just two euros”. Hard to resist… Just pay using Apple Pay, perhaps even before you get in the actual shop, grab your drink and off you go.
This technique will not only work for coffee, but for everything that you like: be it beer, games, boats… Expensive times may be ahead.
We are certainly looking forward to deploying new solutions using Pay. Can it leverage your business? Get in touch to find out.