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You are here: Home / Mobile Tech / Apple Pay Could Change Retail World
How Apple Pay Could Change the Retail World
How Apple Pay Could Change the Retail World
By Jef Cozza / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
Apple has now sold over 10 million iPhone 6 and iPhone 6 Plus smartphones since the handsets first became available last week. Each comes with the company’s new electronic payments service, known as Apple Pay. The service could revolutionize how customers shop, with Apple promising to plant a stake in the heart of plastic credit card readers.

Although other players have tried to launch their own mobile payment applications, such as Google Wallet, Apple Pay launches with an enormous head start on its competitors. The reason: The payment details stored in the more than 800 million user accounts in Apple's iTunes store, and the tens of millions of phones that will soon be in the hands of consumers around the world. As a result, Apple Pay may prove to have a significant impact on retailers, enterprises and financial institutions.

Big Boost to NFC

Apple’s decision to adopt near field communication (NFC) for its payment system is likely to be a huge boost for the technology. Retailers who may have been hesitant to invest in NFC-capable registers will be secure in the knowledge that 10 million consumers are carrying the technology in their pockets, and 90 percent of smartphones worldwide will now be equipped with NFC chips. Additionally, the mobile payments market is expected to reach $1 trillion by 2017.

In addition to convincing brick-and-mortar retailers that NFC is worth the risk, Apple Pay should also provide a big boost for the e-commerce world. By storing shoppers’ credit card information and allowing them to pay for items with the push of a button, Apple Pay hopes to relieve customers of the need to continually re-enter their information on multiple sites.

Not every entrenched player is going to be happy with the brave new world Apple Pay promises to usher into existence, however. Apple Pay is far from the first digital wallet app on the market. The Merchant Customer Exchange, an organization of more than 50 major U.S. retail chains including 7-Eleven, Target and Walmart, has already put out its own payment system, called CurrentC. Retailers belonging to the exchange are currently prohibited from using any other digital payment service.


The arrival of Apple Pay could also represent the death of the practice of enterprises allowing employees to use their own devices for work purposes and to access company data, a policy known as “bring your own device” (BYOD). Because iOS 8 will store users' banking and credit card information, employees may become less willing to hand the phones -- containing even more sensitive personal data -- over to their employers' IT departments.

But while storing financial information on a handset might make users less likely to allow employers to install their own software on them, it may make retail payments more secure. Because Apple Pay generates a one-time code for payments that cannot be replicated, the system promises to be much more secure than the existing magnetic stripe plastic credit card. As a result, major data breaches of customer financial data such as the recent attacks on Target and Home Depot, may become much less common.

And since the credit card data is encrypted on the handset, rather than on Apple’s servers, data thieves will not be able to access users’ payment information by hacking into Apple. That would be good news for both retailers and consumers.

Tell Us What You Think


Posted: 2014-09-26 @ 5:36am PT
EMV Chip & PIN also support EMV contactless... so in most countries in the world (ie. Canada) you can do both and enjoy the additional security that EMV brings to the transaction table.

Posted: 2014-09-24 @ 6:07am PT
How did Apple miss the boat? Last time I checked my wallet, ALL my cards are still using magnetic strips. If anything, some may argue this tech is a generation past the chip and pin already implemented around the world. Since Apple made this tech universal, we can see it becoming much more likely for a full scale adoption, at least in the US. We are in a forced transition period in the financial industry, timing the release of this tech could not be better.

Posted: 2014-09-23 @ 5:48pm PT
Apple have already missed the boat. The rest of the world has already dropped the magnetic stripe and has been using chip and pin for a long time. Why would we want yet another system to have to implement?

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