How Apple Pay will Benefit the SMB

In their latest announcement this week Apple has unveiled Apple Pay which enables iPhone users to pay for goods and services by using their smartphones. Convenience payments, or contactless payments is a thriving area in the payments sector and eith Apple involved is likely to boost the industry as retail outlets rush to upgrade their systems to take advantage of the technology. Here Nick Barnett, CEO of Appsme, gives his view on how the SMB will benefit the most.

“Apple Pay is a contactless payment system, using your iPhone (or Apple Watch) to pay for low value purchases instead of a contactless credit/debit card. By waving your phone at a till or payment point, the sale value is taken from the card you have registered to your iTunes account.

“The service is currently accepted by around 250,000 merchants in the US, out of six million, and is set to launch later this year in the UK and Europe.

“The fundamental benefit of services like Apple Pay is convenience, not only for the customer but for business owners with a high store footfall or regular lunchtime rush. Assuming the purchase is of low value (the limit for contactless payment is £20), the need to dig out a card or carry out a time consuming transaction is completely removed. A few minutes of saved time for each payment can make day-to-day business management duties that bit easier to get through.

“While businesses must initially invest to replace or upgrade their payment system or PDQ machine in store, there are tangible benefits in getting ahead of the game and making the customer experience easier.

“For customers, the prospect of paying for their daily coffee or a haircut on their phone is new, but not alien. Even so, retailers should prepare for questions from customers who aren’t aware of the system’s security measures. Card numbers aren’t stored on the device or by Apple, but are instead assigned a unique number which is encrypted and stored securely within the iPhone or Apple Watch. If a phone is lost or stolen, payments can be suspended remotely.

“We expect larger players and chains to sign up to Apple Pay relatively quickly, but it remains to be seen whether independent stores will bite the bullet immediately. Until results and positive customer feedback roll in from larger brands, and independents feel they can fully weigh up the benefits, uptake may be a slow burn.
“Once systems like this are commonplace for smaller businesses, we’ll be looking to build the technology into our apps.”

Gavin Ray, SVP Products & Marketing at ip.access, said “While some retailers may fear Apple’s power, consumers love the brand so now is time to embrace an association with it via ApplePay to share the rewards and even leverage them to create new customer relationships. Apple, and Google for that matter, is able to build strong customer relationships through payment solutions and its corresponding data collection. To move forward, retailers should be looking to combine their online customer data with their in-store information, and bridge the gap for the consumer, so moving between the digital and physical shopping experience is all but seamless.

“Another element to consider is the millennial customers, who have grown up in the dotcom age, with a smartphone in their hand and social media at their fingertips. Traditional retailers need to adapt and adopt rapidly developing technology in order for them to communicate with these customers in the right way. It is time to start opening conversations instead of simply pushing messaging at potential consumers and hoping you understood their needs.

“Ominpresence, or ominchannel, is becoming the Holy Grail for retailers in an era when consumers have more choice about how they shop than ever before. The honey of Apple’s evolution has the potential to attract more consumers than the bitter-lemon that would be rejecting this customer focused new technology.”

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David Dungay

Editor - Comms Business Magazine