Earlier this week Apple® held its annual worldwide developer conference (WWDC) and it didn’t disappoint. Amidst announcements around operating system and software updates for all Apple devices, including the Apple Watch, and the reveal of the long awaited Apple Music, there was also some exciting news around Apple Pay™, including the addition of rewards programs, expansion into the U.K. marketplace, and the addition of Discover.
For those of you not familiar, Apple Pay is Apple’s digital, or mobile, wallet. Available on the iPhone® 6 and iPhone 6 Plus, Apple Watch, and the most recent iPads, Apple Pay allows consumers to pay with their phone at stores who accept near-field communication, or NFC, based payments. Apple Pay also features an ‘in-app’ payment option for mobile or online purchases.
Launched in the fall of 2014, Apple Pay adoption has been slow. While it’s hard to pinpoint actual transactions, only half of the top 100 retailers in the U.S. accept Apple Pay. As of March, 2015, Apple reported that 700,000 stores were able to accept Apple Pay, which represents 11.7 percent of the total of 6 million retail stores in the U.S. By the end of July, it’s forecasted that 1 million stores will be Apple Pay enabled in the U.S. – steady growth. And, consumer adoption and activation is running a parallel course. According to an InfoScout survey, only 6 percent of iPhone 6 and iPhone 6 Plus users are actively using Apple Pay, while 85 percent of have not even tried the service at all.
With that said, more and more retailers are accepting Apple Pay or working towards it. Over the past several months, big box chains including Best Buy, Express, Kohl’s and Home Depot have all announced plans around Apple Pay acceptance joining Macy’s, Staples, Panera Bread and others. And, on the heels of the rewards announcement, Whole Foods and Kohl’s have already announced plans for Apple Pay rewards.
But, what about small and mid-sized businesses (SMBs) and Apple Pay? Interestingly, the move to chip, or EMV, cards in the U.S. will be a key driver for SMB enablement of Apple Pay and other NFC based payments, including Android Pay and others. This October, SMBs will be strongly encouraged to accept EMV/chip card payments due to a liability shift for fraudulent transactions. As merchant service providers work to re-terminal existing customers and prepare new customers for the future, many are focused on preparing SMBs, deploying hardware solutions that enable both EMV and NFC payment acceptance.
Today, the vast majority of SMBs don’t have customers coming through the door asking to pay with their phone, but that is likely to change. Smartphone sales continue to rise, with Android now controlling over 75 percent of the worldwide marketplace and iPhone sales breaking year-over-year records.
The convergence of international expansion, the launch of Android Pay and Samsung Pay, Apple Pay rewards, new big box retailer NFC acceptance, EMV requirements, and skyrocketing smartphone sales, it’s not about whether mobile wallets will take off, it’s just a question of when. If you’re a SMB owner, why not differentiate yourself in your local marketplace, provide an additional convenience for your customers and your staff, and prepare yourself now for what is sure to be the next big thing in payments.Business & Finance Articles on Business 2 Community