Apple Pay
Will it transform in-store and in-app payments in the UK?
Will it transform in-store & in-app payments in the UK?
Will it transform in-store and in-app payments in the UK?
OVERVIEW Apple Pay is a payment method that works via NFC enabled Apple devices both in bricks and mortar stores and in apps. In stores it uses NFC payment points and Touch ID to make and authenticate payments, while in apps Touch ID is used to authenticate payments without having to enter any card details.
Apple Pay was launched in the US on the 20th of October, 2014 and in its rst 72 hours of availability si gned up more than 1 million credit cards. This move marks the tech gi ant s rst foray into the complicated world of mobile payments.
The idea of simpli ed in-store and in-app mobile payments is not a new one numerous companies including PayPal, Google, Square and Softcard have already staked their claim. However, for years retailers have been hesitant to embrace these technologies in-store for several reasons: security concerns, lack of a clear leader in mobile payments and customers being slow to adopt the technology. Furthermore, the valuable consumer data retailers collect from traditional POS and in-app systems would no longer be accessible. There has been no o cial announcement on when Apple Pay will be available in the UK, but it is expected to cross the Atlantic in 2015.
HOW DOES IT WORK? Users can either select to use their existing iTunes credit card details or take a picture of their bank card to add it to their Passbook. They can then make payments in any compatible shop simply by holding an Apple Pay-enabled device up to a contactless payment point and scanning their nger print on the Touch D button. To pay for in-app purchases, users simply select Apple Pay on the payments page and scan their nger print to authenticate the purchase.
The in-store service requires an Apple device with an NFC chip, meaning that users need an iPhone 6 or 6 Plus or an Apple Watch to take advantage of the payment option. Apple Pay can also be used on the iPad Mini 3 and iPad Air 2, but only for in-app purchases as they lack NFC capability.
WHAT’S DIFFERENT ABOUT APPLE PAY? Apple claims that its new payment method is distinct from other solutions in that it is completely secure. The security of Apple Pay eliminates the concern of many retailers that customer data will be hacked. Unlike Google Wallet, which requires a user to enter a P N code, Apple Pay requires an authorised nger print before a transaction can begin, which is a pretty strong fraud deterrent. Credit card details aren’t stored on the iPhone or on Apple’s servers, which makes payment details far harder to steal.
1 Apple Pay
Will it transform in-store and in-app payments in the UK?
The issuing bank hides your card details behind an arbitrary code known as a token. This code, which is only used once, is used to authorise the payment. Every transaction will also come with a unique encoded passcode that will help determine whether a transaction is legitimate.
When a transaction is made Apple is not aware of what was bought, how much it cost or where it was purchased - that information passes directly to a user s bank. The participating shop does not get to see any payment details. Apple claims that this makes its service much more secure. In addition, if a user’s devices are lost or stolen there is the option to log on to iCloud and remove the payment details from the device.
WHAT ABOUT IN-APP TRANSACTIONS? Apple Pay has the potential to transform the checkout journey of app-using customers. Until recently, without access to PayPal Express Checkout, purchasing goods or services on an app required guest or new users to go through the longwinded process of creating an account and registering a credit card. Using Apple Pay, customers will be able to simply tap their nger on the Touch D ngerprint sensor to complete
a purchase for an item or service in an app. No more frustrating credit card detail screens. In terms of
costs of using Apple Pay in your app, Apple has said that it will generate fees from banks, and not from merchants. This whole process is based on this little piece of plastic, whether“ it’s a credit or debit card. We’re totally reliant on the exposed numbers, and the outdated “and vulnerable magnetic interface, which by the way is ive decades old, and the security codes which all of us know aren’t so secure.
- Tim Cook
2 Apple Pay
Will it transform in-store and in-app payments in the UK?
Eddy Cue, Apple’s Senior Vice President of Internet Software and Services, stated that he anticipates that the majority of early Apple Pay transactions will be through in-app purchases.
PSP INTEGRATION & IMPLEMENTATION The use of Apple Pay in your app requires integration with your payment service provider (PSP). You can nd a list of payment providers who support Apple Pay with their SDKs on developer.apple.com/apple-pay/. Using one of these SDKs is highly recommended. Contact your payment provider for more information. The alternative is to provide your own server-side solution to receive payments from your app, decrypt payment tokens and interface with the payment provider. Handling credit and debit card payments can be complicated and unless you already have the expertise and systems in place, an SDK from a payment provider is the quickest and most reliable way to support Apple Pay in your app. From the information we have at present, once integration with your PSP occurs, implementation of Apple Pay in-app will be very simple.
HOW WOULD APPLE PAY AFFECT IN-STORE TRANSACTIONS? Retailers aren’t all delighted with the level of data security that comes with Apple Pay. Retailers want each transaction to generate useful customer information that can be used in predictive analytics and other crucial business intelligence functions. Apple Pay would hinder retailers’ ability to use the data from credit cards to create customer pro les.