Apple Pay has certainly totted up some column inches today, having made the long-anticapted arrival into the UK.
From today, iPhone 6 users need not bother with a wallet, instead making contactless payments with the ‘tap and pay’ system.
Industry commentators have been united in their general view that Apple Pay is big news for the retail space, with many throwing around such words as ‘game changer’ and ‘revolutionary.’
As always, CBR is on hand to look past the surface ‘revolutionary’ comments, asking industry experts what Apple Pay’s arrival in the UK will really mean for retail, banking, security and consumers.
1. Consumer Adoption
Sean O’Connell, Chief Marketing & Product Officer at Skrill Group, said:
"UK consumers are primed for contactless payment solutions. More than 58 million contactless cards are now in circulation, and contactless payments were up 255% in 2014.
"Although initially wary of investing in contactless, retailers now see it as a very real part of their payments mix and consumer expectations have increased exponentially. Behaviour change, such as that driven by Transport for London, is evident when you watch the millions of commuters swipe in and out of buses, tubes and trains every morning.
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"As a result, I’m much more bullish on success for Apple Pay in the UK – or at least London – than in the US where acceptance has lagged significantly. Here, Apple can benefit from a contactless card "training wheels" period."
2. Banking Industry
Jes Breslaw, Director of Strategy at Delphix, said:
""That Apple and Google have been the ones to crack mobile payments is indicative of the upheaval happening within the banking industry. Digital giants are moving fast to innovate and usurp the monetary capabilities previously seen as the preserve of big banks.
With pervasive technology, a huge install base and deep pockets, Apple Pay is all set to become a vehicle for slick payment services as it further entrenches itself into our day-to-day lives. It begs the question, what next? Apple bank? Google Loans? Amazon Insurance?
"In contrast, big banks risk finishing last in the race for the mobile wallet as they battle complex legacy systems, inadequate development environments, old methodologies and poor non-production data.
"For banks to retain a share of the digital banking future, they need to take the leap and concentrate on modernising their infastructures, embrace DevOps and Continuous Delivery models and make quality data available on demand. Only then will they be on a level playing field with the more agile high-tech companies."
3. Retail Industry
Andrew Gilboy, VP EMEA at Demandware, said:
"With Apple Pay, the tech titan has tapped into a retail truth: that convenience is king. For retailers, mobile payments offer the opportunity to combine Touch ID and NFC capabilities to accelerate the checkout process, boost store productivity and increase profits.
"From today, the proof will be in whether NFC will become the long-term de facto standard for payments. Any time there is change at the cash wrap process, or with the technology, education is required to ensure efficient checkout and reduce disruption.
"Once again, Apple is pulling an industry forward. The buzz alone will force retailers – and consumers – to take notice. I’m not willing to bet against them and the mousetrap they are building, but Apple Pay today is only a fraction of the potential for the future, as time-starved consumers increasingly rely on their smart devices for researching, browsing and purchasing."
4. Business Challenges
Iain Devine, Commercial Director at Salmon, said:
"The launch of Apple Pay could revolutionise the retail landscape – digital wallets offer a wealth of opportunities for retailers and drive value for customers, making in-store payments more efficient, convenient and secure. However, it does bring with it some challenges that retailers need to be aware of.
"For example, data capture is not possible through contactless ApplePay. Retailers will need to develop new ways of utilising data capture if they are to harness actionable insights, improving the customer experience by better understanding them and delivering more tailored service.
"Similarly, retailers will need to review the returns process. Using ApplePay means there will need to be reconciliation against the online purchase card and the ApplePay device serial number, which will change the retailers’ internal processes."
5. Security
George Anderson, Director at Webroot, said:
"There is a constant struggle between making technology more convenient and making it more secure – unfortunately, the two often conflict. And as we add more and more sensitive information to our personal devices this becomes a bigger concern – access to our phones’ photos is one thing, but access to financial data is far more serious.
"Apple Pay essentially makes our phone a wallet so protection needs to be in place – both in terms of authentication and software to ensure the impact is limited should the device be stolen.
"It is important that Apple works alongside UK banks to reduce fraudulent activity. In the US we have already seen fraudsters add stolen credit cards to their devices, therefore giving them the ability to get around chip and PIN. Although there is a need for the public to be diligent and take care of their device and the information on it, more collaboration is required to tackle fraud."
