Apple Pay: Changing Your Customer Expectations

Last Tuesday, Tim Cook introduced Apple Pay: a quick and easy payment solution rolling out with the iPhone 6.

“Apple Pay takes a five-decade-old [credit card] technology and blows it up…It’ll absolutely change the way we pay for things.”

The question is, how will this affect consumer behavior and, as a business owner, how should you prepare?

As a physical retail store owner, this could mean a whole lot, depending on whether you are willing or unwilling to upgrade your point of sale technology to accept NFC payments. I’m curious to see how Apple approaches this retailer adoption challenge.

On the digital front, this will absolutely change the way customers expect the payment process to go when purchasing on their phone, and will affect the platform they choose to use to make that purchase.

A “one-click” checkout is nothing new in e-commerce, but it has been previously implemented haphazardly. A convenient payment solution that consumers can use across multiple shopping apps is a big step up from the alternative of filling out lengthy credit card forms on tiny screens.

Recently, I went on a camping trip. As I was looking around for a good tent, I found one on the website of a local camping store with an outdated e-commerce site. After 10 minutes of loading errors and mistyping my credit card information, I gave up.

Now, imagine I had popped open the Target app on my new iPhone 6 (which is in the mail). A couple quick searches and I’ve found the tent, and a single click later (via Apple Pay) it’s purchased and shipped.

Now, the next time I’m ready to buy online, where do you think I’m going to go?

Which leads to the most immediate effect that we will see – a boom in mobile app purchases versus web e-commerce purchases, since Apple Pay is currently only available for native mobile apps. Meaning, your online e-commerce store can not currently use Apple Pay at checkout.

Since large brands tend to control the native app market, the short term effect could be consumers purchasing less from smaller brands and businesses. That is, until Apple Pay expands to include mobile web purchases as well – whenever that might be.

Would be interested to hear what other business owners think. Feel free to comment below.