Will Apple Pay change the way people make purchases?
At the launch of the iPhone6, Apple introduced their Apple Pay Service. Promised as “Your wallet. Without your wallet.’’, Apple Pay allows users to upload their credit and debit card information by taking a picture and to pay with a single touch by using their iPhone.
Using Near Field Technology, a chip that allows a user to ‘tap and go’, the new iPhone enables payments with a single touch. It can be used to pay online as well, in apps. It will also be available on the new announced Apple Watch.
Security was an issue that was strongly touched upon at the event. Instead of storing the credit card information, the technology communicates an encrypted placeholder ID to the store checkout system, which is then matched to the account information. Merchandisers don’t see the name or the credit card information of the purchaser.
Apple also says that they will not store information in regards to what was bought and how much it costed. If the phone is lost, the information can be locked/deleted. Apple got 3 majors credit cards and most major banks participating in the program, and 22.000 stores accepted this payment method, such as McDonald’s, Macy’s, Bloomingdale’s, Subway or Disney.
Since Apple Pay will be introduced in October, purchases with an iPhone are now made easy. However, remains the question whether merchandisers will integrate mobile-payment systems? But since Apple has usually helped technologies and services to be adopted by the mainstream population, we can assume that they will.
How will this influence mobile payment adoption? According to this Forbes article, mobile payments were a market of $235 billion last year and $15 trillion were transactions with cash and credit cards. Analysts predict that Apple Pay will significantly increase the mobile payments market: http://www.cnet.com/news/iphone-6-the-jolt-that-mobile-payments-needs/
Other services with integrated NFC technologies, such as the ones from Google, have not been massive successes, but with Apple the story could be different. With a history of redefining and getting to the mainstream technologies and services even though they were not the ones to invent them, (including the smartphone), Apple knows how to offer a great customer experience and how to package them better than anything else.
Will the customers habits when shopping change? Apple knows how to change customer behavior better than everyone else so I expect to see everyone soon paying with their iPhones.