Apple Pay was dubbed “the future of payments” by its supporters when it launched in 2015, and was positioned to transform our iPhones into contactless bank cards. Tim Cook, CEO of Apple went so far as to claim that “2015 would be the year of Apple Pay”. So, more than a two years after the launch; has Apple Pay really changed the way we pay?
In a nutshell, no. Not just yet.
Reports from across the pond suggest that adoption and usage of Apple Pay has hit a bit of a brick wall. Here, in the UK, Apple Pay has released almost no data on its performance with British consumers. This is very telling in itself, as payment providers and issuers are usually pretty quick to shout about numbers – at least, when they are favourable.
Tie-ups have been announced with nearly all of the banks in the UK, despite interchange falling on both credit and debit. But low uptake of Apple Pay remains an issue, and wide-scale adoption is yet to be seen. Even in central London, where the number of contactless payments is higher than anywhere else in Britain, it’s still uncommon to see anyone make a payment using an iPhone.
Andrea Dunlop, CEO of Card Solutions and Acquiring at PaySafe, said this is likely because “For Apple Pay – or indeed any new type of payment technology – ultimately the value proposition needs to be underscored by a killer convenience factor: something that a bank card really can’t do. I think this will take several years to play out, although there are positive signs for the future.“
A key issue for Apple Pay, outside of the UK, is tokenisation and merchant acceptance – most retailers, especially the smaller ones, are simply not accepting Apple Pay just yet. In the UK, tokenisation is not such an issue – and yet, merchants are still not demanding Apple Pay.
We probably can’t hail 2015 as “the year of Apple Pay” then, can we?
Apple Pay's future could be bright. iOS 10 will see the launch of Apple Pay 'in-browser', and this could be a complete game changer for the platform. It will pave the way for Apple Pay to be used for in-web purchases, in addition to in-app purchases on iOS devices.
For this to really take off, we can probably predict that just like the iPhone and iPad, the next Mac model will have a built-in Touch ID sensor. This will improve payment security across these devices as biometrics and tokenisation are needed in the process. Not to mention the user-friendly experience.
Providing Apple Pay gets this right, first time, it could become a major player against PayPal’s Buy Now button. However, this is no small task; Apple will need to make sure all PSP/Gateways and acquirers are on board, to encourage adoption, and that everyone understands that acceptance and issuance must go hand in hand.
It’s also important to remember that Samsung Pay and Android Pay are not far behind. Both are poised to take off, and become significant competitors over the next few months. They will no doubt be armed with their own USPs when it comes to the likes of Magnetic Secure Transmission and Google Analytics.
The mobile payments territory is certainly heating up, and the ‘in-browser’ feature is definitely set to cause an exciting stir.
While all of this is going on, contactless cards will no doubt continue to thrive, thanks to their quick and robust performance and consumer experience. For this reason, contactless cards are currently winning the race at the point of sale, but a reinvention in-web will no doubt see a rise in conversion numbers for Apple Pay.