The tech world and consumers alike celebrated Apple’s September 9th announcement that its new iPhones would feature Apple Pay, the long-anticipated tap-to-pay function designed to simplify customer purchases and increase electronic payment security. The press heralded the innovation as highly significant, and merchants already positioned to accept Apple Pay rushed to join the welcoming party.
Characteristic of Steve Jobs, Apple’s late co-founder, CEO Tim Cook jabbed at credit cards as now passé and deemed other smartphone-based payment providers irrelevant. While I might refrain from such boasting, I have to admit that Apple Pay is not only impressive and industry leading technology, heads turned when Microsoft chairman Bill Gates, a bitter rival of Jobs’ and Apple, praised it during a CNET.com interview.
“So the fact that in any application I can buy something, that's fantastic. The fact I don't need a physical card anymore, I just do that transaction and you're going to be quite sure about who it is on the other end, that is a real contribution.”
We’re jumping on the band wagon also by endorsing Apple Pay as not only innovative, but exactly what we predicted for some time would happen. The key reason is that Apple has always has nailed the customer experience. Here’s how:
- It’s super-simple to get started because consumers no longer have to carry an actual credit card, they don’t even have the enter a CC number to start using Apple Pay (CC number is already there with the iTunes account).
- It’s super-easy to use. Customers wanting to use Apple Pay just have to “tap to pay.” iPhone 6’s are equipped with a near-field communications (NFC) antenna, requiring that consumers only hold their phones near the retail counter based receiver. Apple Pay also manages consumer transactions for multiple cards.
- It’s widely accepted already. It’s believed that 250,000 to 300,000 retail locations—including Einstein’s Bagels and Panera Bread Co.—are ready to accept Apple Pay. By the end of 2015, it’s expected nearly every retailer will have NFC readers.
When it launches this month, Apple Pay will quickly assume the lead in the NFC payments race because it requires nothing of consumers beyond downloading the app and appropriate details to their iPhones. It doesn’t demand new behavior or ask that they carry a new, merchant-specific card or merchant-specific app. Just waving their phones over a reader is all they need do.
What does it mean for you?
If you are a restaurant or a retailer looking for payment solutions, STOP and ask these 3 questions about your payment solution:
- Is it easy to get started or does it require customers to enter CC information?
- Is it going to be as easy as “tap-to-pay”?
- Is it going to be widely accepted?
If the answer to any of these questions is no, then stop and think why you are competing with Apple? Payments is going to be won by somebody who makes it easy for consumers and can extend the same way of paying universally. Instead you should focus on what you are trying to do — if you are trying to get information about your loyal customers, do that by building a loyalty solution — just do not compete with Apple by building payment solutions that are really not core to your business objectives.
Again, nothing new for customers to learn. And when customers find any experience made simpler, they inevitably gravitate toward it. This advancement has been a long time coming, but we’re excited it’s here!
/ Jitendra Gupta is a Co-Founder and Head of Product at Punchh, a mobile engagement and actionable insights platform that includes branded mobile apps for campaigns, games, loyalty, online ordering, payments, referrals, reviews, gift cards, surveys, and integrates with social networks and operators’ POS systems to gather 360° customer insights. Punchh helps restaurants increase same store sales and profitability by driving repeat visits, word of mouth, new customer referrals, and higher returns from marketing campaigns.