Mobile Wallets: Top 4 Reasons Why Apple Pay Will Impact Small Businesses
Heard of Apple PayTM yet? Well, you can’t turn around without reading or hearing information regarding Apple Pay. Even with all that buzz around it, many businesses are hesitant to implement this technology. Most recently, larger retailers such as Nordstroms, bypassed whether they should implement it and moved directly to the timeline for adding Apple Pay to their brick and mortar locations.
For the small business owners, there is a great deal to consider. As a supporter of Apple Pay – for many reasons – our experts at TSYS Merchant SolutionsSM are sharing the rationale for tipping the scale in favor of implementing this new technology. Check out our top four reasons to take Apple Pay seriously.
Apple® is one of the rare brands that succeed in almost everything thing they do. As a result, they have watched the mobile payments industry take a few sucker punches over the last several years and learned from previous mistakes within the mobile wallet space. As a result, they came out swinging at the launch by already having support from big name banks, biggest card issuers, large retailers, and over 10 million passionate Apple fans. Moreover, long-time Apple analyst Tim Bajarin predicts that about 30 million Americans will have an iPhone® 6 or iPhone 6 Plus by year end, according to USA Today. Apple Pay as catapulted mobile wallets into the ecosystem. Now, it has a shot at success and it’s only going to grow from here on out. This means your competitors will be entering into this payments space – business owners don’t want to get left out.
Contactless payments – a.k.a Near Field Communications (NFC mobile wallets) powers Apple Pay and is why this technology works. Behind the scenes, your iPhone and the sales terminal have a quick and spontaneous conversation via near-field communications (NFC). This is why Apple Pay only works on the iPhone 6 and 6 Plus, and with modern terminals: Without NFC hardware, that conversation can’t take place. It’s a great technology that can’t be eavesdropped upon by fraudsters.
The EMV® transition in 2015 is probably one of the biggest driving forces for implementing Apple Pay. As a result of this shift, all businesses will need to accept credit cards with EMV chips in order to avoid becoming liable for fraudulent transactions if they don't have equipment with an enhanced security system called EMV. So, if a business has not upgraded their POS system, when it’s time to upgrade equipment to EMV, they can get the NFC capability that will most likely accept Apple Pay. As a payment processor, we know that terminals can be costly, but we know this change will have a positive impact on business long-term.
Additionally, as reported in a recent article in Entrepreneur, many equipment makers have been also jumping on the bandwagon. Soon after Apple announced support, iPad-based retail payment system ShopKeep decided to start including NFC and plans to distribute new equipment to its 10,000 merchants over the next year. Other equipment makers are expected to do the same. The Ingenico iCT250 is one example of a terminal with this capability and is available now for merchants to use when accepting payments.
Security, security and security. Businesses both large and small are concerned about protecting customer data. Apple Pay will encrypt each transaction with a unique code that prevents shoppers’ personal information from being stolen as it’s transmitted through a retailer’s network, according to The Wall Street Journal. Many experts would state that as a small merchant, you are more susceptible to a breach than the larger merchants. This technology will assist in fraud protection by ten-fold.