Why both customers and merchants should adopt Apple Pay ASAP

I've been a big proponent of Apple Pay for as long as it has been around. It was launched in late 2014 just after the iPhone 6/6 Plus release, and it would be fair to say adoption was slow at first. Apple announced a modest list of partners they were working with to get this payment option out that year, but anyone who did the math knew that list of merchants was nowhere near enough to let anyone leave their wallet at home. A little over 2 years later we're closer to that reality but there is definitely still a ways to go.

Apple Pay is accessible at more places than ever (Apple cites 2 million merchant using it) and people are using it more. We don't really know exact numbers, but Apple reported a 500% increase in transaction volume in Q1 2017, ad that's coming off 500% growth in the quarter before that too. That said, PYMENTS.com reports about 5% of iPhone owners use Apple Pay, which I'm sure is lower than Apple would like. Although considering Apple has sold over 521 million iPhones since the iPhone 6 was released (first to support Apple Pay), that could be quite a few people.

I personally am a big fan, and proponent of Apple Pay, and Android Pay for that matter. Paying with your phone is nice and provides a few key benefits to both customers and merchants alike.

Why should customers use Apple Pay?

The odds are you are just an average customer and you want to know why you should take the time to set up Apple Pay on your iPhone and start using it whenever you can. First you should know that Apple Pay only takes a minute or two to set up, so don't let that stop you.

Apple Pay is set up in the Wallet app on your iPhone, and all you have to do is take a picture of your credit/debit card you want to link with Apple Pay and it will read everything off the card for you. Enter your CVV (back of the card) and you'll either be done, or your bank will have a second step of verification to make sure you are who you say you are. I use Chase and that meant I could have the end me a text message or email to verify everything. That took about 15 seconds to come through, and I was good to go from there.

Speed, baby!

The most obvious advantage Apple Pay has over most other payment methods is that it's fast. Swiping your credit card isn't that bad, but any place that does EMV (chip-and-pin or chip-and-signature) is just a chore these days. Verification takes longer as there is more back and forth communication between your card, the reader, and your bank. I appreciate the added security, but I never cease to be annoyed whenever I have to pay this way.

Apple Pay on the other hand is nice and zippy. Unlike basically all other pay-with-your-phone options out there, Apple Pay benefits from you not even needing to open an app to us it. Hell, you don't even need to unlock your phone. Simply hold your phone up to the credit card terminal, have your finger resting on the home button, and the payment goes through in a moment. There's still a few seconds you have to wait, but you're not interacting with the terminal in that time, wondering what you have to do next.

As an additional benefit to those of us with Apple Watches, Apple Pay is a simple double tap of the side button away. Double tap the button and hold the Watch up to the reader and boom, you're done. It's magic.

Security

While checking out with Apple Pay is faster than EMV, you shouldn't think you're sacrificing security for convenience. Apple Pay talks to credit card terminals with the same EMV standard as your chip-and-pin card, it's just a wireless connection instead of the physical connection when sticking a card in a slot.

This means that the data is encrypted, and requires verification from your phone, your bank, the card reader, and the merchant themselves are all who they say they are. If something along this chain is wrong, the transaction fails. It's not ironclad, but it's the best we have right now.

Remember 2013's Target hack? How about Home Depot's hack the next year? Millions of consumers had their full credit card information revealed, and had to get their cards replaced ASAP. This was a major pain for everyone involved and it should never happen, but it does.

After the Target hack in I had to cancel my debit and credit card, and wait for them to come in the mail. Not fun.

If I had been able to pay with Apple Pay, this would not have been nearly as big of a hassle. That's because the credit card number passed to the merchant in an Apple Pay transaction is a special number that links to my credit card number, but is totally unique. That means if a place I pay with Apple Pay is hacked, the hackers don't get my credit card number, they get my Apple pay number.

This Apple Pay card number is totally useless outside of Apple Pay transactions, so it's worthless to hackers. They can try to run that card manually all they want, but they're not going to get anywhere.

Additionally, if I wanted to take no chances and get a new Apple Pay number, I can go into the Wallet app on my iPhone, tap into the card I use, and tap "Remove Card" to kill it. I can then go through the quick setup process from there and set up the card fresh with a new number.

Privacy

This last one may be a small point, but some people will appreciate it. The magnetic strip on your credit cards has not only your credit card number, but also your first and last name. Most big chains have elaborate systems in place to track your shopping habits, and they can track you to some extent with just your account number, but getting name information is huge.

EMV is often better for this, but a lot of banks still have your name as a piece of information a merchant can pull from the card data. Apple Pay meanwhile does not send any name information over with a transaction. It's a small thing, but could be a perk to those a little more privacy-conscious.

Why should merchants use Apple Pay?

While Apple Pay is great for customers, it's also hard to find a downside for merchants either.

It's free!

You need to spend money to make money, but you don't need to pay a penny to take advantage of Apple Pay. Apple does not take a cut of transactions, so your fees for payments will be exactly the same as they are right now.

Maybe you are with a payments provider who charges you extra to take advantage of Apple Pay, but I am yet to find one that does this.

In-person Apple Pay transactions are "card present"

The percentage credit card companies charge you for each transaction can vary based on transactions being "card present" or not. There is less risk associated with card present transactions, and they cost less to process in most cases. Apple Pay essentially works like regular cards in this way, as Apple Pay transactions were the customer holds their phone up to your reader counts as card present, while online or in-app transactions do not.

It's easy to set up

Most payment providers who offer Apple Pay have it built into their platform so you have to do very little to get set up. Check with your payments provider to see what you need to do to get started, but often it is as easy as buying the right card reader and plugging it in.

Faster checkouts and better conversion

Finally, that speed benefit your customers have can also be your benefit. Quicker checkouts mean better conversion, happier customers, and increase the odds of gaining repeat customers. People may love shopping at your store, but don't kid yourself into thinking they love waiting to check out.

If you are already taking Apple Pay, or this article has convinced you to start accepting it, Apple has a free kit of signage you can put up in your store so you can let your customers know you are ready to take fast, secure transactions.

Conclusion

There are still some reasons you may not use Apple Pay as either a customer or merchant. Maybe you don't have an iPhone 6 or newer, or maybe you have an Android phone (in which case kudos for making it this far in the article!). Or maybe you have a payments provider who you love for other reasons but doesn't have Apple Pay yet. These are fair reasons, but the reasons are disappearing day by day.

Apple Pay is a secure, fast, and overall convenient way to both make and take payments. Especially if you are just a customer who would enjoy a little less hassle when buying your groceries, you really, really should set up Apple Pay today.

Apple Pay Seriously Drives Sales

USA Technologies, Inc ran a 6 month study that "targeted point-of-sale advertising of Apple Pay" and the results are impressive, if not that surprising. The study essentially seems to have looked at sales before and after adding a "pay with Apple Pay" sticker to their vending machines.

The results are very impressive, and are yet another data point as to why you should be supporting Apple Pay, and other mobile payment options, if you are selling anything online. The study's results over the 6 month study are below:

  • 135% increase in mobile transactions
  • 36% increase in overall sales
  • 44% increase in total transactions

The results are excellent, as just about any business would be happy with a 36% increase in sales from simply adding a sticker to their machine. That's amazing!

How to Get Apple Pay on the Web

As it stands today, Apple Pay works in 2 environments:

  1. Physical retail via NFC "tap to pay"
  2. In-app via the iOS Apple Pay API

These are a great start, and they take care of a lot of the transactions that people make on a regular basis, but there's one area that isn't covered: the web.

No matter how good of a web developer I am, I can not incorporate Apple Pay into my online store due to the limitations of Apple Pay. These limitations make total sense, but it would be so nice if there was a way to use Apple Pay on my website. There are rumors swirling that Apple is going to show a way to do just that in iOS 10 coming later this year, so I wanted to dive into how they could possibly do this.

For a point of comparison, Google just had their I/O conference where they also discussed the limitation of not being able to use Android Pay on the web, and they introduced a solution that they think will solve the problem: Instant Apps. The idea is that when you're checking out on Target.com for example, you'll be able to seamlessly install the cart portion of the Target app and run your payment through an app, despite it not being completely installed on your phone. It's a clever solution, but it also feels a little hacky. It's cool technology, but it's ultimately a workaround solution and assumes a lot of things. It assumes:

  • The customer is on the newest version of Google Play Services
  • The merchant has an Android app
  • Their app supports Android Pay
  • They have updated the app to support Instant Apps

That's a lot of assumptions, and the odds of a customer and merchant coming together, both meeting all these requirements is pretty slim. I don't see Apple doing this, as Google's Instant Apps don't sound like the sort of thing Apple would even consider.

I think Apple's solution is going to be building Apple Pay into Safari, the default web browser on iOS. They'll have an API that can be called from a website that will only work in Safari. As a web developer, I'll be able to write a function (via JavaScript, most likely) that will call the Apple Pay API in iOS, submit the transaction from iOS, and return my site the response (transaction approved, declined, error, etc.) so that I can complete the experience for my customer.

This solution seems technically possible, and would be a great opportunity for merchants who are looking for a payment option that reduces their PCI compliance requirements as all the payment information stays completely off their web servers. It would also help customers have an easier checkout experience than entering a dozen or more text fields when paying. I hope Apple is working on this and we see something very similar to my proposed implementation.

Now is the Time for Apple Pay to Strike in the US

The switch to EMV in the United States sure has been a mess, hasn't it? Whether you're a customer or a merchant, the conversion has likely been expensive at worst, inconvenient at best, and confusing all the way through.

The conversion for merchants has been less than smooth. A study by CardFlight from last month shows that about 37% of merchants are EMV-capable and about 25% of total in-person transactions are using EMV. Those numbers are still pretty low when you consider that the EMV deadline was set for October 1, 2015 and people are still barely getting going.

On the consumer end, EMV hasn't been a cakewalk either. For example, I didn't even get an EMV card from my bank until January of this year. Now that I have it, I find about half of the places I shop actually have EMV capabilities turned on. Many places have an EMV terminal, but some sort of paper sign over the card slot telling me to please swipe my card instead.

On the occasions that I can use the chip and pin, it's a pain. The big problem is that transactions just take longer and require more concentration on my part than I'm used to. I get errors when putting the card in the machine because I didn't line it up exactly right. I sit there patiently waiting for the card to be read, enter my pin, and wait again for what feels like forever before the reader beeps incessantly at me to PLEASE REMOVE YOUR CARD. I understand the security benefits of EMV, but from a user experience perspective, it's adding friction and annoyance to a process that used to be very straightforward.

This is where Apple Pay (and Android Pay, Samsung Pay, and any other standard NFC-based payment system) comes into play. Paying for something with Apple Pay is far easier than both my new EMV card as well as the magnetic strip cards of old. I don't have to press any buttons or enter a PIN in most situations1. I simply hold my phone up to the card reader with my fingerprint on the iPhone's home button and I'm done. It takes about a second to read, and has never failed of gotten a bad card read.

I really think this is something Apple should be pushing as hard as they can with payment processors, merchants, and customers. I know I'm not the only one who is frustrated by this whole EMV conversion, and Apple should be tapping into this frustration as much as they can. People pay for things everyday, and if your phone can make that a comparatively delightful experience, that will build customer loyalty and drive up that all-important "customer-sat" number Tim Cook loves so much.

As a fan of technology, I sometimes do things that most people won't, and shouldn't do with gadgets, but Apple Pay is not one of them. I think everyone who has a phone that supports Apple Pay should be using it whenever they can. It's easy to set up, is more secure than traditional credit cards, is just as secure as EMV payments, and is a much more painless checkout experience overall. If you haven't gotten Apple Pay set up on your iPhone yet, I'd highly suggest you try it out this weekend and I'm sure you'll fall in love.


  1. Some merchants can require you to enter a PIN, but most don't in my experience. 

The Future of Payments is not QR Codes, it's Apple Pay

Yesterday Walmart rolled out their own payment system called Walmart Pay. Its aim is to get Walmart shoppers to start paying with their phones. As for phone payments, I support Walmart for trying to get on board with what is so clearly the way of the future. However, as I snidely remarked on Twitter, I think how they pursued this goal is a waste of time and money for the mega-retailer.

My primary concern is that this is a proprietary payment system that you can only use at Walmart. You can use your credit or debit card at any store you please, and the process is the same no matter where you're shopping. Maybe you have a loyalty card at one or two stores, and maybe you use a coupon app like Target's Cartwheel or Starbuck's stars system to get perks, but 95% of your purchases are paid with the same exact plastic card no matter where you are shopping. There is a beautiful simplicity in that, and it's lost with proprietary payments systems like Walmart Pay.

The future is not everyone having 30 different stores' apps on your phone so you can leave your wallet at home when you go out shopping. Doing some quick mental math, I frequent at least a dozen stores regularly, and probably go to 50 or so more shops throughout a year. I'm not going to install a new app for each one of those stores, that would be insane! And yet, if more companies pursue proprietary systems like Walmart Pay, this is the future we can look forward to.

What kills me about this is that there is already a good solution out there that works and companies like Walmart are ignoring it. I'm speaking of course of NFC payments. Apple Pay, Android Pay, and even Samsung Pay are all easier to use, faster, and just overall better experiences than any proprietary systems I've seen out there. Walmart's app requires me to find the app on my phone, open it, go to the payments page in the app, and bring up a QR code to present to the cashier to scan. This is very similar to my experience with CurrentC last year at Target, which I found more than a little lacking.

By comparison, the use of an NFC payment system like Apple Pay is built into my phone, so all I have to do is hold my phone up to the card reader with my fingerprint on the hime button and I'm done. I don't have to find a specific app to launch, and I don't even have to unlock the phone. It's such a quick interaction that blows any app-based payment system out of the water.

Maybe Walmart's rationale is that there aren't enough phones out there with NFC built in to take advantage of Apple/Android/Smasung Pay, and they want to reach as many people as possible, but ultimately that's a lame excuse as well. The 5 most recent iPhone models support Apple Pay, Android Pay is rolling out to a bunch of phones that had NFC built in years ago, and Samsung is selling a ton of Galaxy phones with their payments system built in. The people who are more likely to take advantage of a "pay with your phone" system are more often than not the same people who upgrade their phone more often and probably have a phone with these NFC payment systems built in.

It will be interesting to see how Walmart Pay does in the coming months, but I suspect this will end up being a big waste of time and money for the company. NFC payments haven't taken over the world overnight, but I still think they are a better, and more future-proofed solution that what we're seeing from companies like Walmart.

Apple Pay Isn't a Big Deal Anymore, and That's Great!

It would be safe to say I'm an "early adopter" when it comes to tech. I get the most I new stuff I can afford as soon as it's available. I keep up with the latest phones, tablets, and web services even though I could certainly get by just fine with less. I'm also obsessed with trying out all of my options1, so when something new comes out, I give it a go.

All of this adds up to me of course trying Apple Pay out as soon as it was available back in October 2014. I was in a Walgreens literally the morning Apple pushed the service live and bought a Coke with my phone. It was awesome, and the cashier didn't bat an eye. It seemed like the future was here and it was just as easy as advertised.

But then I started to try Apple Pay as many places as I could, and it wasn't always as easy as I hoped. I tried it at McDonalds and they had to awkwardly hold the card reader out the window for me to reach with my phone. I was...weird. And then even places like Whole Foods and Panara, where Apple Pay was built into the existing terminals, I would always get a look from the cashier that implied "oh, you're one of those people." I literally had someone roll their eyes when they asked if I was paying with my phone.

The funny thing is that Apple Pay never failed, it always worked perfectly. The only impediments to me using it were social hesitations as I didn't want to make a scene, or minor training misses on retailers' part in getting their employees to understand these new payment rollouts they were supporting. I can't imagine I'm alone in feeling total love for the product that Apple Pay was, but slight hesitation about using it all the time.

Fast forward 1 year

One thing I've noticed over the past few months is that I'm using Apple Pay regularly and it's no big deal. I walk up to the register at Meijer and pay with my phone an nobody bats an eye. I can even pay with my Apple Watch at Jewel and the reaction tends to be "that's so cool!" and not the eye roll I had almost come to expect. It's not Apple Pay, but I used the Starbucks app to pay with my Apple Watch a few days ago and the barista literally said "shit, that's badass!"

Suddenly Apple Pay has shifted from weird outlier to something totally normal, and sometimes just plain badass (don't take my word for it, as my barista!). This is how phone payments should be! Weird tech doesn't take off, but tech that can slip seamlessly into our lives has a chance. In my experience, Apple Pay has shifted to just another way to pay for stuff, and while that sounds kind of boring, it's actually very liberating.

The trigger was not Apple Pay, but EMV

And as much as I'd like to say that Apple Pay and Android Pay (and that weird stop-gap Samsung solution) have made people think differently about how they pay for things, I think the most powerful force has been the onset of EMV (chip + pin and chip + signature) in the United States. EMV has made everyone throw out decades of muscle memory and start to think about how they're paying in stores. Not only have the specific actions changed, but the process is slowed down and requires you to pay more attention to the sale.

Oh, and those terrible BUUUZZZZZZ sounds when you try to swipe your card and when it's time to take it out of the reader. Who the fuck chose those sounds?

I have to think that this industry-wide change makes phone payments seem less like someone being eccentric and more like just another new way we pay for things. When you add in the security pitch, speed compared to EMV, and convenience of being in your phone, suddenly Apple Pay seems like a better, more palatable pitch. The payments industry is in flux and people are relearning old habits. This is the time for phone payments to really go mainstream, so I hope Apple and Google start to put a lot more marketing force behind this and get more people taking advantage of the feature in their phone they may not even know about.


  1. I've run this site on: WordPress, Squarespace, Statamic, Ghost, and Tumblr. I use OmniFocus for my tasks now, but I've also used Things, Todoist, 2Do, Reminders, and Due. My RSS reader is currently Feedbin, but I've also used Feedly, Google Reader, Fever, and Feed Wrangler. You get the idea :) 

First Impressions of CurrentC

NOTE: This piece originally ran on June XX, 2015 but was taken down at the request of CurrentC.

One of the perks of working for a big company is that you sometimes get to try new and interesting things before they’re made available to the public. It doesn’t happen too often, but when it does I make sure to take full advantage. Even when that thing is something mocked by most tech pundits, including myself, I have to at least give it a go.

So when I got the chance to give CurrentC a whirl before it goes live to everyone else, I took it. I was able to skip the invite system and register with an account today. I’m happy to say that CurrentC is not as bad as I feared it would be, but it’s definitely not as easy or as fast as Apple Pay.

Setup

Setting up the app was a bit of a pain. I had to verify my email a couple times before they were satisfied that I was me. If I felt like this was a security measure, then I would feel great, but it seemed more like the service was confused. It’s still early days, but still, not a great start.

One thing I really hated was that you have to “secure” your account with 3 security questions. Moving beyond the fact that this is a poor way to secure anything online, they only give you three options for what questions to use. They’re the classic “who was your 1st grade teacher?”, “what was your first boy/girlfriend’s name?”, and “in what town was your first job?”. I don’t even remember my first grade teacher’s name! What if I hadn’t had a job yet? What if I had never had a girlfriend?

Maybe there are more questions in their database, but you randomly assign 3 to each person, but that doesn’t make any sense either. This felt very weird all over.

Once you have a CurrentC account set up, you have to enter a debit, credit, gift card, or checking account as a payment option. I entered my Target Red Card, which went perfectly smoothly. I do wish that I could just take a picture of the card like I can with Apple Pay.

A selling point for CurrentC is that you can combine your payment method as well as loyalty program numbers to a single barcode. So I added my Cartwheel account and my team member discount number to the app. Setting up each of these also went well.

All in all, setting up the app is not that painful. It’s certainly not as smooth as Apple Pay, but now that it’s there, I never have to think about it again.

Use

Using CurrentC is simply not as good as any of the NFC-based payment options out there. I found the process slow and a little cumbersome.

As opposed to Google Pay which will just requires you to unlock your phone and touch it to a reader, or Apple Pay which doesn’t even require you to unlock your phone, using CurrentC is a multi-step process. You have to unlock your phone, launch the app, tap the “Pay” button in the app, and hold it up for your cashier to scan your phone. Yes, I know this isn’t a ton of work, but it’s comparable to how much work it takes to just swipe your old card.

There was also a noticeable delay in when they scanned my phone to the payment actually going through. It was a good 5-10 seconds between entering my PIN (which you still have to do if it’s a debit card) and getting the “payment approved” message. Normally there is less than a second between PIN and “approved."

The pitch of these mobile payment solutions is that they are both faster and more secure than your current options. CurrentC fails hard at the first category.

But all is not wrong in the world of CurrentC. I did like the fact that I was able to pay with just my phone and leave my discount card in my pocket, and not open the Cartwheel app at all. Since I loaded them all in the app, they were both applied to my purchase automatically. To their credit, they worked just how they normally would.

One final weird note

I showed the payment screen with my QR code (god damn, QR codes are hideous) to some of my coworkers and asked if they would take this as a payment method from a customer. None of them knew what the app was yet, and they all said it looked shady.

I would agree that the app lacks a certain amount of polish and just feels cheap. The UI is minimal, but like “this isn’t done yet” minimal and not “classy piece of art” minimal. It feels like you’re using a wireframe of an app, not a completed, secure payment system.

Overall

So am I going to use CurrentC again? Yeah, I think I will. It makes sense for me as I have to scan my discount card every time I make a payment at a Target store. I may as well just have them scan my phone and keep my wallet in my pocket. I don’t think I’ll be using it anywhere else, though. It’s just not that appealing.

I think that CurrentC is a manifestation of what mobile payment skeptics think paying with your phone will be like in the future. It’s fiddly, iffy on security, and really not any faster than using a plain old credit card. While the modern solutions from Apple, Google, and even Samsung are delivering simple, secure systems, CurrentC feels like a cheap knockoff.

But with a few companies (including Target, incidentally) softening their commitment to CurrentC, we may not need to choose.

Target "Loves Apple Pay" and Wants it ASAP

Target CEO Loves Apple Pay, but Wants Chip-and-PIN Cards First | Re/code

“I’d love to have Apple Pay today,” he said. “Once we finish, we’ll be open-minded” about supporting other payment systems. Cornell said he has met with Apple CEO Tim Cook and told him the same.

I called it a few weeks ago, Target is getting on the Apple Pay (and other NFC options) and CurrentC isn’t going anywhere.