When Apple Pay was first introduced to American consumers less than six months ago, one of the big questions was whether or not credit card companies and banks would jump on board the new card-less technology. The second was would consumers be confident in this system or remain as leery as they were about Google Wallet. To prevent the less than enthusiastic acceptance of other previously introduced card-less credit payment services, Apple will definitely need to do a better job educating consumers and retailers to avoid confusion at the register.
There’s nothing especially difficult about using Apple Pay technology. Add a credit card to the iPhone Passbook app, swipe the phone over the pinpad at a participating merchant checkout, touch the screen with your finger and your fingerprint will confirm your identity. The transaction will be authorized and a receipt will be sent via text message to complete the purchase. Consumers information will be more secure than a traditional credit card because it never transmits account numbers to merchants and allows payment authorization without even turning on the phone.
Where it Stands Now
Nearly 90 percent of the credit cards available to American consumers now support the system along with a growing number of the nation’s banks. The latest stats I could dig up found that an impressive one million cards were activated in the first three days after being offered to Apple users. According to research broker ITG’s research, 1% of digital payments made by US consumers in November were conducted with ApplePay. While InfoScout, a consumer advocate website that surveys consumers on mobile and wearable technology, reported 9% of iPhone 6 users tried the service on Black Friday.
In a Position to Draw New Users
It appears that Apple has a distinct advantage over earlier attempts to provide card-less payment services with the ability to use their ready-made iTunes customer base to sign up new Apple Pay users. However, putting a damper on acceptance will be consumers who are using older iPhone versions – that’s approximately 500 million iPhone users who can’t use the new technology. Customers who are in a two-year contract will need to wait it out or upgrade. Most people won’t pay an early termination fee just to have another payment option.
Apple Pay will be available in 220,000 locations that already take mobile payments via the NFC’s short range, secure wireless capabilities. It’s success now depends on consumers and retailers. With a history of raising consumer awareness, reliable services and consumer-friendly marketing, Apple Pay may quickly grasp a command of credit card purchases. For consumers the technology will be appreciated for its fingerprint authorization that better secures their phones and data. Purchases will be made faster and be less likely to be hacked.