How Apple Pay will Improve Mobile Commerce
Mobile Commerce has made the shopping experience easier by allowing shoppers to buy goods anywhere. While clicking on an item and adding it to your cart is quick and painless, the checkout process is often another story. First time shoppers are greeted with pages of information to fill in—including information to create a username (recommended so your second round of purchasing will be a bit less tedious)billing address, shipping address, and credit card information. For many, this sea of text boxes to fill out is enough to abandon their cart. Brick-and-mortar stores have had the one up on payment due to the ease of swiping a credit card. However, with Apple Pay bringing a new interest to mobile payment, the m-commerce shopping experience is about to be streamlined.
While not the first mobile payment method (Google Wallet was introduced in 2011), Apple is on the fast-track to being the first company to do mobile payments right. Setting up your Apple Pay card is as simple as taking a picture of your credit card and then entering your security code. With one touch via the Touch ID scanner, a payment transaction is complete. The ease of a simple fingerprint scan is preferable to entering in a pin number, as Google Wallet uses. The convenience of this checkout method makes it harder not to shop online.
The simplicity of Apple Pay is expected to enhance mobile commerce sales. Despite the fact that m-commerce is on the rise, conversion rates are still low. This is likely due to the lengthy checkout process. Therefore, it is safe to assume that an easier checkout process will boost mobile sales. A simple touch will replace the need to enter name, birth date, and credit card numbers. Without a tedious checkout process, shoppers are less likely to abandon their carts and more likely to become paying customers.
In addition, Apple Pay addresses the growing concern of online security breaches. Apple Pay uses near-field communication (NFC) technology to allow owners of the iPhone 6 and 6 Plus to pay for items by holding their phones in front of payment terminals. A variety of security measures are used to protect payment data, including token payments, fingerprint authentication, and a secure method for storing the data. Rather than transferring credit-card information with each transaction, Apple Pay uses a stand-in “token” that’s exchanged between iOS devices and the point-of-sale terminal. Essentially, your iOS device is sharing a code word with the payment terminal. This ensures that even if someone happens to listen in on that code, it’s useless on its own. The token works with another security measure called a cryptogram, a number generated specifically for the transaction. The cryptogram uniquely identifies your device to make sure the transaction isn’t fraudulent.
Evan if you are anti-Apple or wary of Apple Pay, its introduction is bound to help you. Retailers will have more choices when it comes to accepting payments: Paypal, Amazon Payments, and Apple Pay. This competition is good for retailers and consumers and could lead to decreased fees and improved profit margins for online retailers.
In terms of mobile payment, the US has been lagging behind. However, with the introduction of Apple Pay the major concerns of mobile shoppers have been addressed: secure payment & easy checkouts. With a newfound interest in mobile payments, more companies are bound to adopt some form of option, Apple Pay or not. With the ease of mobile shopping, it is likely conversion rates will improve, therefor it is increasingly important to have your site both optimized for mobile and mobile payments. While Apple Pay is still new to the ecosystem, there are plenty of retailers adopting it and preparing for the impending changes it is bound to bring. If mobile payments were not on your horizon, it is certainly something that should be on your 2015 roadmap.
