Getting ready for Apple Pay

Anthony Caruana
1 November, 2014
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Apple-Pay-Business-macworld-australiaApple Pay was announced at the recent Apple event as one of the new features that takes advantage of the NFC capability and security features built into the new iPhone 6 and iPhone 6 Plus.

But what exactly is Apple Pay and what will it mean for your business?

Unlike the United States, Australian retailers have embraced the use of PayWave and other contactless payment systems. Most of us are well accustomed to pulling a card out of our wallets and tapping on a payment terminal to complete small transactions.

Apple Pay provides credit card providers with a way of integrating the contactless payment system with the NFC radio in the phone through software. Passbook stores the credit card information and the integration of Touch ID means a thief will not be able to use your phone to make payments. There’s also a new chip called Secure Element that stores encrypted payment information.

In order for the system to work in the United States, Apple has negotiated with several major credit card providers so that their cards will work with Apple’s solution.

Apple’s approach has been to work with the largest banks first in order to cover as many customers as they possibly can. We’d expect smaller credit card providers and banks to come on board over time.

For Australian businesses, we’d expect Apple to follow a similar pattern with the big four banks to come online with Apple Pay first and smaller credit card providers to follow suit.

Apple Pay MobileIf you’re already banking with one of the big banks, chances are that the contactless terminals you’ve already installed will work perfectly. If you’re business hasn’t installed contactless EFTPOS machines yet, we’d hold off in the hope that banks will discount those services when Apple Pay comes online here.

The other, less discussed, element of Apple Pay is how it works with shopping apps. If your business has an app used for selling products to customers, it will be able to work with Apple Pay through an API (Application Programming Interface).

Rather than having customers enter and store credit card information in your systems, they’ll be able to nominate a credit card in Passbook to use with Apple Pay. As the process is tightly integrated, it will simplify things for customers, as they no longer need to enter credit card details or sign into PayPal.

If your business uses an app to sell products and services, it’s time to get your Apple Pay integration onto your development roadmap. That way, when Apple Pay is available to Australian customers, you’ll be ready to leap straight in.

It’s worth noting that some retailers in the US are resisting the shift to Apple Pay and Google Wallet – Google’s contactless electronic wallet. This seems to be because they are looking to establish their own payment systems. Whether they succeed or not remains to be seen.

So, what will you need to do in order to be ready for Apple Pay?

  1. If you haven’t already, investigate installing contactless terminals on your EFTPOS machines.
  2. Keep an eye on your bank and listen out for any hints in the news as to the local rollout of Apple Pay.
  3. If your business uses an app to sell products, look at integrating Apple Pay. If you sell in the US market, you may get some rapid return on that investment.

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