Apple Pay: what it means for small businesses

Small Business Advice 13 October 2014

We explore the new payment service from Apple


Looking for mobile payments’ Check out our solution >


It’s been a month now since Apple launched two new devices to much fanfare and fawning.

There have been some issues with phones bending and the software having a few teething problems, but all things considered the newest gadgets look mighty impressive and are, as ever, likely to make a big impact on our lives.

The most important thing for us in among all the fuss around screen sizes and pixel density, was the news of a new payment feature. As proud card processing geeks, we’re always intrigued by new payment methods and so decided to take a closer look at Apple Pay to see if it might be of use to small and medium businesses like yours. Go mobile today >

What exactly is it?

On September 9th Apple announced that its latest devices, the iPhone 6 and Apple Watch, would feature a new payment service known as Apple Pay. Available only on these brand new devices, the credit and debit card service will utilise built-in fingerprint recognition technology and NFC capability to enable cardless payments.

The NFC mentioned above stands for near field communication. This means every phone carries in it a chip that can transmit information over a very short distance, much like your contactless bank card. Its not revolutionary, but when you combine it with the fingerprint scanner on the phone and watch, you’ve got a very convenient and secure payment system right there on your phone.

To pay, you just hold your iPhone near the contactless reader with your finger on the Touch ID. Your phone will automatically sync to a designated credit or debit card stored in your phone and the payment will be processed instantly and confirmed with a reassuring buzz and beep. The watch works in a similar way, with users pressing a button on the side of the device and then holding the face close to the NFC reader. Go mobile today >

Who can use it?

Apple Pay is only available in America for the time being and a full release in the UK hasn’t yet been scheduled.

In the States it’s backed by almost every major bank and card provider going, which is proof if it were needed that it’s got major league financial banking. A collection of some seriously big name brands have all signed to accept Apple payments instore using their existing NFC readers. These include the usual big hitters such as Starbucks, Nike, Subway, McDonalds and the Disney Store, as well as several other household names across the pond.

Barclays are the only UK bank that are so far confirmed as a Apple Pay partner, but other banks will no doubt be announced when the formal release date is revealed.

Will it actually take off?

E-wallets created by the likes of PayPal and Google haven’t really hit it off with consumers in a meaningful way, presumably because they haven’t been simple, convenient or secure enough to convince people to ditch their cards.

However, experts are predicting that Apple Pay could be the very piece of kit to change how we pay. The reason being that because lots of people (approx. 800m worldwide) already make payments using iTunes, consumers are comfortable with paying through Apple and should be quite at home with the NFC technology.

And given that you only need to touch your phone to pay and there’s no transactional information stored by Apple, the speed and security of the system should appease even the most hack-wary consumer.

Will it work for small businesses?

The short answer to this is: who knows’ The card readers required to take payments through the phones are perhaps out of most small businesses’ price range and given that many smaller stores, shops and restaurants still don’t have card machines, it’s unlikely that smaller business owners will be flocking to fork out for this new set up.

That said, some experts are forecasting that as many as 50% of stores will have the necessary equipment for accepting Apple payments come the end of 2015. That’s quite an amazing level of uptake for a payment method that hasn’t really progressed much in the last 5 years, but if any company can change our habits, it’s Apple.

It will most likely come down to demand and how well the new devices do among users. Music buying was forever changed by iTunes and its likely that Apple Pay could really switch up the way we all pay, but it may take a while for demand to build up, given that the new phones and watch have only just launched.

We’ll keep you posted on updates relating to Apple Pay and let you know how it might help your business reach more customers.

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