Gina Obert
By Gina Obert on April 10, 2015

Apple Pay and New Payment Technologies Battle for Consumer Attention

Picture this: You are set to check out at your favorite store and, of course, your arms are full of packages. Instead of digging for your wallet or rooting through a purse trying to find a credit card, your phone - already in your hand - touches the payment pad and you are set to go. No spilled bags, no acrobatic stretches finding the right card, no hassles.

Additionally, this swift move has provided an extra layer of security for your financial wellbeing by not putting your account number out on hackers’ open market for easy access.

All thanks to Apple Pay.

Apple Pay is just one of the new technologies that are revolutionizing the way we pay for our purchases in retail stores and restaurants. The other big player entering this wide open field is CurrentC, a mobile wallet being developed by Merchant Customer Exchange (MCX). While Apple Pay has enormous brand-name awareness, CurrentC is backed by some of the biggest names in retail, including Walmart, Target and Best Buy.

These two potential behemoths are not alone in offering new payment technology. Google and PayPal already have mobile wallets available, and Softcard is a mobile payment application offered by three major wireless carriers: AT&T, T-Mobile, and Verizon.

What do Apple Pay and other new payment technologies have to offer consumers in the fight to control payment processing at the point of sale? The most important benefits include:

Simplicity

Once accounts are linked to a device, paying for purchases is as easy as tapping the device on the store’s payment pad, even if the customer doesn’t have the card with them. Forgot your wallet or purse? No big deal. You have your phone, right? Which leads us to…

Familiarity

This should also be a very comfortable transition for consumers to make, as it involves their phone, which has become a necessary and ever-present tool in most consumers’ minds. When was the last time you saw a person under the age of thirty without a phone in their hands? Exactly. But the most important benefit might be…

Security

Apple Pay uses a tokenization system during a transaction. The system gives your account a temporary number (token) that is transferred for payment. Your actual number is never exposed to would-be thieves. Additionally, you have to “unlock” the token with fingerprint verification on your device. Further security for your credit comes from the fact that you don’t have to carry the card to use it, protecting it from theft and loss.

Drawbacks

There have been a few negatives with the new payment technology rollouts. Staples experienced a massive data breach shortly after moving to accept Apple Pay, and several retailers had to make major adjustments in order to read the near-field communication (NFC) chips that Apple Pay uses, and still stay in compliance with agreements through MCX.

For Apple Pay, one of the major hurdles the advanced payment technology faces is hardware access. Consumers need an iPhone 6, iPhone 6+ or Apple Watch to use Apple Pay, and the phone replacement cycle in place now indicates that more iPhone 6 upgrades won’t happen until late in 2015, at the earliest. Additionally, many businesses will wait until some format leader clarity begins to take shape before investing in the POS hardware needed for any new payment technology.

Of course, Apple and the other companies probably won’t play nice with each other and will force restaurants and retailers to choose one platform over the others. This will probably delay a more universal utilization of new payment technologies and could set up a VHS/Beta type scenario.

Hopefully, the battle between Apple Pay and the other new payment technologies will shake out soon and not become a major headache for consumers at the point of sale. With this in mind, you need to be sure that your POS provider can offer you solutions that will integrate these new payment technologies when you upgrade your POS system.

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Published by Gina Obert April 10, 2015
Gina Obert
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