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Apple Pay – what is it and should retailers care?

Apple announcements are made with great fanfare – more than most product launches or company statements. So, when the multinational tech company publically announced its new venture – Apple Pay – this grabbed the attention of more than the usual twenty-something, trendsetter, Shoreditch troupe.

In a world where mobile is yesterday’s news, what is Apple Pay and should retailers really care? We list the major key points of consideration so you’re kept up-to-date with this emerging payment option.

What is Apple Pay?

Apple Pay is a similar service offering to global online payment system PayPal. It provides a new payment preference for the consumer by pulling all their credit card / debit card payment data from its Passbook App. The unique difference with Apple Pay is that users will be able to pay for items in-store, as well as online. It’s a digital wallet revolution at the touch of a button.

How do you use it?

This contact-less payment solution can be used with a single swipe – with no need to download an app. All you need to do is hold your iPhone or iWatch near the contact-less reader at checkout and press your finger on the Touch ID. To add to this seamless experience, consumers won’t have to wait for a confirmation message either – the phone will simply vibrate and beep to confirm successful payment.

Which devices support Apple Pay?

iPhone 6, iPhone 6 Plus and Apple Watch, new iPad Air 2 and iPad mini 3. Note, for in-store purchases you will need to have an Apple Watch, iPhone 6 or iPhone 6 Plus, as they have the all-essential NFC (near field communication) radio antennae.

Where can you use it?

Apple Pay can be used for in-store purchases, within apps and online.

How do I set up Apple Pay?

Add your debit or credit card details from your iTunes account to Passbook by entering the card security code.
OR
Add your card details on iPhone by using your iSight camera.
OR
Type in your information manually.
N.B Remember the card details you insert first will be your default payment preference. To change this, simply go into Passbook to update or go into Settings to select a new default.

What will retailers need to do, to accommodate this change?

If you want to provide your customers with an Apple Pay option you’ll need to:

  • Check if your business is already accepting contact-less payments – this may already enable your company to accept Apple Pay
  • To validate Apple Pay then contact your payment provider to get it set-up
  • Don’t forget, if you have contact-less payment in place, display the payment mark on your shop window, company website and email footer

Is Apple Pay the future of payment?

It’s early days to predict the future of Apple Pay – it’s yet to be officially released in the UK but predicted for this month. But if it’s anything to go by the USA launch, we’re in for a ride. It will reportedly be available in more than 250,000 locations and has already gained the trust of UK consumers. In a survey where smartphone consumers are asked whether or not they would trust brands to deliver a smartphone payment option Apple reached the top five – despite the fact it’s yet to be released (eMarketer, 2015)!

With millennials predicted to be the mainstay of m-commerce in 2016, the question is – will this be the main consumer group of Apple Pay? Roughly 35 million UK residents aged 14+ will shop with a mobile, while 26 million will purchase with a smartphone or tablet by 2015. Supporting this, JWT Intelligence research reveals that millennials are twice as likely to use a “tap to pay facility” compared to other age groups. Meanwhile, more senior segments will need to see a clear-cut benefit before adopting this as a payment preference of choice.

Without a doubt Apple Pay is going to make waves – whether it’s here to stay or not, the jury is out. For now.

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