I have received lots of emails today asking me for my thoughts on Apple Pay and how this technology will effect our industry and our portfolios in particular. Here are my thoughts in summary and you can watch the video for the full scoop on what I learned in my research and in talks with Integrity Payment Systems.
First of all, keep in mind that Google Wallet has been around for a long time, which is basically the exact same technology and it has gone no where. That doesn’t mean Apple Pay will go no where, but it does mean that consumers are not already particularly hungry for this technology so it will probably not take off like a rocket. I believe that for the next 6 months, Apple Pay will be a novelty only. Very few people will actually latch onto it as a primary source of payment for two reasons. First, they are not used to it and secondly, percentage wise, very few businesses accept this form of payment so consumers can’t yet depend on it for their primary payment form.
Secondly, I believe that this move by Apple and their partnership with Visa, Mastercard and AMEX has set the mobile payments industry in an NFC direction. There has been talk of Blue-tooth being the mobile payment technology of choice but if so, I think that will be a ways out and what business owners need to prepare for is NFC technology rather than blue-tooth.
Thirdly, I believe this presents a great opportunity to make more merchant account sales. The vast majority of the credit card terminals out there not NFC or EMV capable. Also, keep in mind that very few touch screen POS Systems or Tablet systems are NFC Capable, so over the next 24 months, someone is going to sell or loan your clients an NFC Capable device and you want to take advantage of this opportunity to build your client relationships and generate new ones rather than losing accounts.
Lastly, as I have been saying since 2012 when I made a video about Google Wallet that I do not see this technology as disruptive to our industry. This is NOT a competing technology in my opinion or in the opinion of the processors and industry contacts I spoke with today. These transactions will be processed much like a standard transaction with their own form of interchange fees and processors will have the opportunity to mark up these transactions through Interchange Plus Pricing or by placing them in a Tier for Tier pricing. I don’t have any specifics on this yet, but from what I see with this technology and the partnerships that Apple has established, this is not a threat to the merchant services industry, but rather an opportunity to expand our offer to our clients. If Apple Pay is going to be widely accepted in small businesses, the only way to make that happen is to have an army of independent sales professionals sell the idea to them.
My guess is that somewhere between 9 months to 18 months from now, small business owners in your area will start to feel the heat if they don’t accept this form of payment. I don’t think it will take off overnight but I think a year from now, it will not be uncommon for a consumer to ask a small business owner if they accept Apple Pay and I believe that if your small business clients could put a sign up in 6 months that said, “Apple Pay Accepted Here” that would be a good move for them and might even increase revenue and customer loyalty.
Our current timeline looks like Q1 of 2015 before any processor will be able to offer NFC Ready Devices that are capable of accepting Apple Pay to their small business clients and you can be sure we will be on the cutting edge with our team and we are already looking at ways to include NFC technology in our new touch screen POS Programs. Ask your processor what their plans are for accepting Apple Pay next year and if you are looking for a team to join, as always, let us know.
Feel free to ask me any questions or post your feedback or further info on Apple Pay below.
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