In the seemingly endless parade of new features announced by Apple yesterday was one that should make you sit up and take note.
Apple Pay — a new way for iPhone users to pay you for goods and services without a credit card.
Apple Pay will be part of the new iPhone 6, the new Apple Watch, and other devices too as Apple rolls out iOS 8 to its existing base of users. The iPhone 5 family of devices will support Apple Pay for online and in-app transactions, but the physical retail use will only work if you also buy the new Apple Watch.
Until today, mobile payments has been a fragmented — and mostly stalled out — attempt to make Point of Sale payments at retail shops easier, faster and safer. Companies including Visa and Target have all tried various ways to get us to use our phones or other devices instead of a plastic credit card. Some of the biggest collaborations, like ISIS Wallet (now called Softcard) have struggled to gain any traction at all. (Starbucks built its own payment system and seems to be having better luck.)
But Apple Pay is different.
Already 220,000 retail locations around the USA have pledged to use the Apple Pay service. This includes Bloomingdale’s, Disney Store and Walt Disney World Resort, Duane Reade, Macy’s, McDonald’s, Sephora, Staples, Subway, Walgreens, Whole Foods Market, Target and of course Starbucks. Arguably, it will be the most widely accepted mobile payment method available.
Why is everyone jumping on this bandwagon?
Hands down, it will be the easiest & safest payment method ever. With the tap of their phone (or iWatch), Apple customers will be able to give retailers a one-time payment in any amount. But since the physical phone acts as the intermediary, there is no credit card involved. The retailer collects no personal information of any kind. And Apple, which acts only as the intermediary (sending payments to Visa or other services) does not collect any data about your purchases.
Finally! A little bit of privacy and security in this big-data, hacker-space we call shopping!
So how will a small business adapt? By gearing up with the best POS service-providers. Shop Keep CEO Jason Rickelson has pledged that his small business Point of Sale equipment will support Apple Pay. It seems likely that Intuit QuickBooks and other forward-thinking providers will jump on the bandwagon.
This is a rapidly evolving story, so watch for updates. In the meantime, get ready for a massive demand for mobile payments from your customers.
Dedicated to your (mobile-payment) profits, David