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Blog: How Consumers Might Use Apple Pay in 2015 – Everything You Need To Know

03/02/2015

A new kind of mobile payments system will soon become mainstream in the UK and it comes from, perhaps unsurprisingly, the global giant Apple. The new system, which every retailer needs to be aware of, is called Apple Pay.

Apple Pay is designed to enable customers to pay for their goods via their mobile device, including iPhones, iPads and the Apple Watch. This new payments system will change, not only how consumers operate but how you, as a retailer, handles payments.

So to make things a bit clearer, below you’ll find answers to some of the most important questions that you, as a retailer, need to know about Apple Pay.

How will your customers use the new Apple Pay payments system?

The Apple Pay system uses Near Field Communication technology (NFC), which you may have heard of before since Android has been using it for mobile payments for a while now (e.g. Google Wallet).

If you’ve decided you want to accept Apple Pay, then you will need to install an NFC reader, or ‘Touch ID’ sensor as it is otherwise known, next to your till. You will also have to talk to your either your current merchant card processor, or approach another POS (point of sale) vendor in order to see what they can offer you in terms of Apple Pay/ NFC plans and then weigh up the different benefits and costs to your business.

Once you have the NFC sensor and scanner installed, all your customers have to do to make an Apple Pay payment is place their iPhone on the sensor and their finger on the Touch ID scanner in order to identify themselves and that’s it. Simple. Customers will need to have one of the latest iPhones, however, since the NFC chips were not installed in any of the earlier models.

Will it complicate the way your business takes payment?

For all intents and purposes, Apple Pay (just like all other Apple products) should make things easier and quicker, not more complicated. However, as with all new systems there will probably be glitches, which will no doubt be ironed out with time.

NFC itself has been around for a few years now so it really shouldn’t complicate anything. Plus the fact your business accepts Apple Pay, in addition to many other payment methods, will only improve customer experience, which is no bad thing!

Apple are trying to make Apple Pay as inclusive as possible so it should work with your company’s app if you have one, or you are looking to develop one, you shouldn’t have to worry about the payments system being incompatible. It is always best, however, to get your app developers to liaise with Apple during initial planning stages to make sure you get it right.

Will Apple charge your business to use Apple Pay?

Apple has stated that it will not be charging merchants to use their system. Instead it will charge a fee, on each purchase made, to the banks that are involved in the payments system.

Will your customers’ data be secure?

Apple always insist that customer privacy is an absolute priority whenever they release a new service or product and it is no different with Apple Pay. If one of your customers loses their iPhone or it is stolen, then all they need to do is suspend payments from the device using the ‘Find My iPhone’ app.

Thanks to tokenisation, where sensitive card data is substituted with non-sensitive equivalents, (a token) with no real meaning or value, there’s not even a need to cancel the physical card itself. Customer data is not even transferred to you, the retailer; all the transaction involves is a one-time payment number and a dynamic security code.

Apple has a solid history with protecting its customer payments data, so no doubt Apple Pay will impress just as much, although there has been an embarrassment or two concerning nude celebrity photo leaks. Apple does insist that this was down to targeted hacking of passwords and usernames, as opposed to a security breach of the iCloud. In response Apple have said they’re beefing up their security in iOS 8, so retailers and customers can be assured security is being taken seriously.

Will hackers be able to steal your customers’ credit-card details from their devices?

Hackers will not be able to steal your customers’ credit card details from their iPhone and devices since those details are not actually stored on the phones or on Apple’s servers, unlike Google Wallet, where customer card data is stored on Google’s servers.

Tokenisation enables sensitive card data to be substituted with random data which will mean nothing to hackers and therefore be of no interest to them, negating the desire to hack in the first place.

Apple have also pointed out that such worries about hacking Apple Pay are slightly unnecessary, since the system is essentially trying to replace a payment system that is a lot more susceptible to fraud and hacking, i.e. the physical piece of plastic card itself, which is far easier to lose, clone or steal.

Will your customers’ be tracked if they pay you using Apple Pay?

In the current payments system, the person behind the till can, potentially, see your customer’s name, signature and card number. This is a definite weakness. With Apple Pay, however, none of these details can be seen. Apple do not and will not be collecting private data such as what your customers are buying or how much they’re spending.

Are many other retailers currently supporting Apple Pay?

Although Apple Pay is yet to launch in the UK, the system has been widely accepted in the US with retailers such as Macy’s, Staples, Subway and McDonalds all accepting the new payments system, plus of course Apple Pay being available in every Apple store. With new NFC payment points already available in many UK stores, there’s no doubt that UK retailers will take to the Apple Pay system just as eagerly as US retailers have done.

Do all Apple devices support Apple Pay?

In short, no they don’t.

To explore this in more detail, your customers will need to have either the iPhone 6 or the iPhone 6 Plus to be able to use Apple Pay as these are the only phones with an NFC antenna.

Of course, this is likely to annoy many a user who doesn’t yet have one of the latest iPhones. To get round this Apple have said that customers will be able to use this technology if they have an Apple Watch. There has indeed been a lot of talk about the Apple Watch enabling use of older iPhones (only the 5 or 5S) for small transactions only…but it remains to be confirmed how exactly this will work.

How will your customers pay with an Apple Watch?

Apple have stated that paying with the Apple Watch is a simple case of double clicking to ‘pay and go’. All that your customers will need to do is double-click the button located to the digital crown and hold the watch face next to the contactless reader on your counter. When the payment information is sent, your customer will feel a gentle pulse and hear a small beep in confirmation.

When will this system be launching?

Apple Pay has already launched in the US but a launch date for the UK has yet to be set. There is much talk about the official launch date the system in the UK, with many suspecting that it will be in the early months of 2015…but with Apple yet to confirm, it really is anyone’s guess!

As a retailer, who no doubt wants to be competitive in the marketplace, it’s therefore a very good idea to try and stay in the loop and therefore be ready to implement the payment system before your competitors!