Apple Pay since its launch last month (October 20) is already reaping much success as millions of iPhone and iPad users rush to activate Apple Pay on their device. However, while many consumers are giving high ratings for one of Apple’s latest innovative product, many big retailers are shunning Apple Pay, why is that?
See our review on Apply Pay here
Apple Pay is a mobile wallet payment system by Apple that allows users to make payments at retail stores in the US without the use of credit/bank cards and cash. To pay for goods, users simple tap their iPhones 6 against a special reader at a merchant’s register. In the first three days (3) after release over 1 million consumers sign on to Apple Pay while banks in the US and many merchants welcome Apple Pay before it was even launched. Apple Pay is a win-win scenario for both merchants and users as it allows quick and easy transaction at check-out points for users while merchants are able to avoid long lines at check-out, credit card frauds, paper works amongst others. Why then are many big retailers shying away from allowing the use of Apple Pay at their stores?
According to The Wall Street Journal drugstore chains Rite Aid and CVS Health “disabled technology last month that would allow customers to use Apple Pay in some stores. The two drugstore chains are part of a group developing a competing mobile-payment system called CurrentC. Other members include Wal-Mart Stores and Best Buy”. This is because these merchants are looking to have their own mobile payment method called CurrentC, as part of a consortium of retailers called the Merchant Customer Exchange (MCX), out very soon. This ban however is said to be temporary and not permanent, but why place a ban on a competitor when CurrentC will not be ready for launch until early 2015?
In a statement officials at Rite Aid said that they are currently evaluating their mobile payment options and therefore cannot accept or use Apple Pay or any other mobile payment system(s) that use NFC technology. The same sentiment was express by CVS.
Some experts believe that fees are one of the biggest deterrents to why many merchants are reluctant of using Apple Pay. What many merchants are looking to do is to lower their cost, for example merchants pay between 1% to 3% of purchase amounts to credit-card companies whenever consumers use their plastic to pay for a purchase, and that is why many merchants would rather cash payment instead of bank cards.
According to The Wall Street Journal, CurrentC system will not be using credit- card companies as a part of their mobile payment system in an effort to to avoid interchange fees. It will however “allows users to pay with personal checking accounts, gift cards, and some retailer-backed credit and debit cards.”
Current C will work much different from Apple Pay as users make a purchase by using an app to call up a QR code on a mobile phone to be read at checkout. CurrentC is currently being tested in some markets in anticipation of a rollout next year.
Apple Pay is a wake up call for many retailers who have been dragging their feet in the sand for years when it comes on to mobile payment…. until now. Although many players have entered the market, for example Google with Google Wallet, retailers were sitting idling by while the market was ripe for mobile payments. It seems these retailers were waiting for a wake up call before they would embrace mobile payments, well that is exactly what Apple did with Apple Pay- now big retailers are rushing to get a piece of the pie.
But why is it that retailers weren’t quick or motivated to embrace Apple Pay? Some experts believes this to be as a result of the fact that retailers will no longer have access to valuable consumer data they would normally gather from traditional POS systems, secondly, some retailers are afraid of the high fees, and lastly, many felt mobile payments would make hacking and fraud even more likely.
However, Apple Pay has overcome consumer and retailers fear and have developed a product that is secure, quick and easy to use. Similarly, Apple is one of the most beloved tech company in the world- when Apple speaks, everyone listens, if Apple says a category is worth investing in, then everyone else things so. Moreover, Apple has millions of followers worldwide that are loyal to Apple as Apple is seen as trustworthy, an iconic brand with premium technology products people want to buy. No wonder over 22000 retailers and large banks in the US got on board very early in the game.
Many Retailers and banks embrace Apple Pay, what did these retailers and bank realize from early that the other merchants and banks that are currently not on board haven’t realize or afraid of?
1. Apple Pay is the most secure and easy to use mobile payment system currently in the industry, therefore fraud and identify theft will be very minimal, if not non-existent.
2. Apple has a very large following, therefore not getting on board would mean lost of revenues.
3. Apple Pay is quick and easy to use.
4. Consumers love anything that is quick, safe and easy to use. Therefore consumers will be quick to get on board; retailers who do not embrace the needs of their customers face possibilities of losing those customers who uses Apple Pay.
How to use Apple Pay
Once the app has been loaded on users phone with the user’s credit card information, all the user has to do is approach the terminal at the participating retailer, hold the phone up to it and swipe the screen, utilizing the user’s fingerprint to authenticate the purchase.
It is no secret that Apple Pay is something that the market (consumers mainly) has been waiting for in a very long time. Apple Pay although recently release, October 20,2014, is already changing the retail landscape. Conducting transactions whether online or at stores will never be the same again. Retailers who fails to see the benefits of Apple Pay and are resistant of change be left behind- this is because many shoppers are already taking their businesses to other stores that allows them the privilege of paying using Apple Pay.
In what direction the market is heading is not yet certain but one thing is certain is that Apple Pay seems to be the beginning of something new. Perhaps the market is heading in the direction that many persons fear- The Mark of The Beast in terms of micro chips in our skins which will be the end of mobile payments, cash and bank cards.
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