Enabling Technologies

The Good, The Bad and The Ugly about Apple Pay

MEDICIFounder and Chief Strategy & Innovation Officer

Many good things have been said about Apple Pay. Many good things have been delivered by Apple Pay. But there are dark clouds on the horizon. Sorry Apple fans (including me) for breaking this bad news.

The Good

Merchant Link recently released Apple Pay contactless payment solutions for its MICROS integrated point-of-sale systems. Merchant Link is known for its payment gateway and data security solutions. The company recently completed testing and transaction processing of Apple Pay payments on its POS systems. The solutions are available for POS systems that have been certified by Merchant Link. These solutions use both Verifone and ViVOtech hardware devices.

Contactless payment solutions continue to grow in demand as NFC-enabled mobile devices including phones, tablets and now watches continue to penetrate the market. Companies like Apple are evolving and releasing solutions that are leveraging the reach of smartphones. Merchant Link is trying to portray itself as an industry leader by integrating potential solutions like Apple Pay contactless payments. Merchant Link is driving its products, services and solutions in order to fulfil merchant and customer needs.

Apple Pay is active across 19 banks and 42 merchants. Apple Pay is already active across 19 apps as an in-app payment option. Apple Pay is gaining traction in usage among its merchant base. To cite an example, McDonald’s also noted that an impressive 50% of its tap-to-pay transactions, since the release of iOS 8.1, came from Apple Pay.

Update: A number of credit unions in U.S. are currently working towards adopting Apple Pay NFC Payments, as revealed by Co-op Financial Services. The company announced that it is a Visa “Engaged Issuer-Processor”, authorized to immediately service the enrolment of credit unions in Apple Pay. Other current issuers that have joined the Apple Pay bandwagon include L&N Federal Credit Union, UW Credit Union and M&T Bank (source: Apple Insider).

The Bad

Whole Foods is being touted as a high-profile adopter of Apple Pay. Mike Dudas, a known payments expert, had estimated that Apple Pay already accounted for 1% of all Whole Foods transactions, only a couple of weeks after its launch. But the encounter of Henry Blodget, CEO of Business Insider, tells a different story. He had asked a cashier at a Whole Foods in Hyannis, Massachusetts about Apple Pay. The cashier denied that he has witnessed shoppers using Apple Pay to pay. Moreover, it turned out that the cashier was not even trained to use Apple Pay.

An observation by Jefferson Graham, a technology columnist for USA TODAY, at a Panera Bread store showed that there were few takers for Apple Store at that store. The store did have “Now Accepting Apple Pay” signs put up but Jefferson only a single customer using Apple Pay to pay in a span of two hours at that store.

The Ugly

InfoScout recently tracked the shopping behavior and opinions of those in its 170,000 strong consumer panel. InfoScout surveyed those who own an iPhone 6/6 Plus and shopped on Black Friday at a retail store that accepted Apple Pay. It was revealed that more than 95% of those, who were eligible to pay using Apple Pay, didn’t use it this Black Friday. Moreover, more than 90% of iPhone 6/6 Plus owners, who shopped on Black Friday, have never tried using Apple Pay at checkout.

Further insights on the survey reveal that 32% of eligible users haven’t tried Apple Pay because they aren’t familiar with the way it works and 11% haven’t even heard of it. Seems Apple still has lots to do in promoting its Apple Pay solution.

Amit Goel

MEDICIFounder and Chief Strategy & Innovation Officer

“Amit Goel is the Founder & Chief Strategy & Innovation Officer for MEDICI. Amit’s vision is to build a strong FinTech market network that involves financial institutions, banks, startups, investors, analysts & other key stakeholders across the ecosystem – helping each one of them in a meaningful way by removing the asymmetry of information and providing a platform to engage & transact.\ \ Amit is passionate about bringing actionable FinTech-focused insights, innovative products & services for the FinTech ecosystem. Some of his work involves startup scores, bank scores/assessments, predictive viewpoints & other innovations that have helped MEDICI’s customers and the ecosystem. He has been named amongst the Top 100 FinTech thought leaders/influencers in the world & Top 10 in Asia multiple times by reputed agencies, consulting firms as well as financial institutions. Amit has built MEDICI (formerly LTP) as a new-age, tech-enabled advisory/research firm, which is now considered the #1 global research & innovation platform for FinTech in the world.\ \ Amit has been writing pioneering viewpoints on financial technology space that have been ahead of the curve since 2010. His data-driven predictions have helped the customers as well as the ecosystem. His past work experience includes a strong background in strategy & market analysis and advisory to clients (from big business houses to Fortune 500 firms) in payments, commerce, financial services & IT/technology. In the past, Amit had also founded a successful consulting & research practice called GrowthPraxis and has worked at Boston Analytics, Frost & Sullivan, and Daimler Chrysler in strategy & research.”