Accepting Apple Pay

Any new launch by tech titan Apple is guaranteed to arrive to a great fanfare. Apple fanboys happily queue around the block to be the first to get their hands on new products. But the response to its Apple Pay service has been markedly less fevered, notes Hannah Prevett

According to research released this summer, just three per cent of iPhone 6 owners regularly use Apple Pay to buy products in stores. Furthermore, a third of people don’t know how to use it, the survey from analytics firm InfoScout found. Of those who had taken the trouble to try it, a large portion clearly found it wanting: 13.1 per cent of people said they used the payment system in June, down from 15.1 per cent in March.

Geoffrey Barraclough, a retail technology consultant, believes the novelty soon wears off. “It’s quite fun the first two or three times you do it, but it doesn’t take things an awful lot more forwards. Apart from myself, I’ve never seen anybody else use it, which tells you something.”

The performance of Apple Pay had been particularly disappointing on the London transport system – which helped contactless card payments to gain momentum. This is down to the time it takes to complete transactions, says Barraclough. “It takes longer than using a plastic card because the thumbprint ID adds another 1.1 seconds to the transaction time. 1.1 seconds in neither here nor there when you’re paying for groceries, but 1.1 seconds when you’re at a turnstile with people you actually is significant,” he explains. “A lot of people are trying it once or twice on the tube and saying it doesn’t really work and then not using it again.”

The answer may be to remove the thumbprint authentication for low-value transactions where speed is important. “You need to remove the requirement for thumbprint ID for low-value transactions for it to become ubiquitous. If you could just tap on the reader on the tube, and not need to do anything else, that’d be great,” he adds.

Early days
Teething troubles are, however normal, according to Dennis Jones, CEO at Judo Payments. “Like everything new, adoption takes time. But Apple Pay is a very real alternative to card and cash, with the lion’s share of the device market, we believe it’s just the beginning of a transformation of how we pay and consume.”

“The future of money will be mixed for some time to come, we’ve come a long way from trading beads to the introduction of paper money to credit cards. It’s always been about convenience, speed and security. This is evolution - maybe even revolution,” says Jones.

There have been some early wins, Barraclough points out. “Don’t forget you can pay by Apple Watch. The evidence shows that users quite like this, though they’re not being evangelical about it.” This hasn’t been the experience of Daryl Wilkinson, head of group innovation at Nationwide, who said soon after launch that Apple Pay could be a competitive differentiator for banks. “I saw some tweets that suggested that people are switching banks now to move to those that offer Apple Pay and are offering other Apple based services,” he noted. As Nationwide’s customers were amongst the first to be able to use Apple Pay, this would’ve been music to Wilkinson’s ears.

There is also a strong use case for in-app use of Apple Pay. “That’s the really interesting piece – it really improves everyone’s experience,” says Barraclough. “In the physical world, so far, it’s a gimmick, but on an app, it’s brilliant. I love it.” He used Apple Pay in this way the first time last week, to load credit onto a coffee shop app. “A screen popped up, I put my thumb on it and that was it – job done,” he explains. It’s technology from providers such as Judo, that enable these in-app transactions to be as frictionless as possible. Using touch ID, users can quickly and securely check out with a single touch.

“We’re seeing some really exciting, often surprising, design-led experiences within native mobile apps,” says Jones. “Additionally, reward and loyalty are converging with mobile payments – in-app. This means more relevant offers for consumers and higher retention rates for the retailer. This enables local and global to deliver more value, right to the hand of the customer.”

Barraclough argues that introducing a loyalty element is also the way to improve the in-store experience of using Apple Pay. People need to be incentivised in some way – particularly if they’re going to switch from their contactless cards. “If you look at contactless, it was around for an awful long time before it took of. Then TfL introduced it and it started to be widely used by the lunchtime sandwich traffic in central London too.”

“For AP to take off in a physical environment, someone needs to come up with a use case that’s exciting. They need to make me want to pay that way because it’s easier or better than using a plastic card. That could be a reward of some kind of the experience of using it. There is actually something about tapping your phone and touching a button to pay that makes it kind of magical,” he says.

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