Apple’s March 2015 Spring Forward event didn’t disappoint. The presentation is full of the usual fanfare for Apple fanboys and fangirls, including new products, new observations, and new insights. But it also packs a punch for business owners around the world.
While some retailers still consider Apple Pay to be a fancy new toy that will fade over time, Apple’s CEO Tim Cook disagrees. During his presentation, he trots out impressive iPhone Sales and mobile payment growth indicators that send one clear message: customers want secure mobile payment options, and Apple Pay is giving it to them.
Understanding a Frenzy in the Making
Apple Pay is carefully positioned to be an industry game-changer. Mobile payments have long been sought out as “holy grail” retail payment solutions. But Apple is the first to engineer a payment ecosystem that is both more secure and more convenient to use than traditional credit cards. The company has accomplished this goal by putting into place the following five cornerstones of successful product development:
Hungry, hungry consumers.
Apple has an uncontested upper hand in the area of registered consumers. A report last year cited Apple as having 800 million registered iTunes accounts with credit cards on file. No matter what your product or positioning, you simply can’t do wrong with this kind of incumbent consumer base and Apple uses this position to its advantage with Apple Pay.
As a result of many documented and damaging data breaches at US retailers over the past couple of years, consumers demand high standards when it comes to security. If they are going to entrust their payment card and personal data to anyone, it will be to a large, reputable company like Apple.
Apple has gone all out to enforce this security by designing a payment system that does not transmit sensitive data and that calls on fingerprint Touch ID for verification and authentication. Customers are safe, thieves are thwarted, and fraudulent transactions are nonexistent.
At its October 2014 launch, Apple Pay was accepted at 200,000 locations. Within six months, it expanded to 700,000 locations. Analysts predict this number to break 2,000,000 locations by the end of its first year.
Apple is in a unique position to dominate mobile payment infrastructure, too. The company combines the power of a 42 percent (and growing) device market share; more than 2,500 bank partnerships that support consumer credit cards; and merchants that have already transitioned to Near Field Communication Point of Sale technology to deliver an incredibly organized customer experience. The stage is already set for the customer to pay when and how he wants.
A reputation for driving interest.
Finally, Apple has proven that it is a leading force in changing consumer behavior at scale. Apple has made every new and emerging technology sexy and main stream, from the personal computer and telephone to digital music and wearables. Its expanding influence into the mobile marketing with Apple Pay is simply the latest iteration of customer-focused technology that inspires an excited frenzy.
Watch Out, Apple Pay is Only the Beginning
2014 might have introduced the most powerful player, but 2015 is going to mark the battle of the mobile payment powerhouses. Google’s Android Pay will create new startups and services for Android devices. Samsung has also entered the ring with the acquisition of Loop Pay, which will roll out as Samsung Pay. Among these three key players, more than 96 percent of the US smartphone market will be covered with a mobile payments solution.
Retailers that want to service any of these consumers (or stay in business…) need to understand that mobile payments are here for good. Mobile payment options will continue to define how your customer shops at your store, on your website, and in your apps, and they represent an incredible opportunity to proactively please your customer.