Apple Pay has been making headlines in the tech industry since its launch last October, with the most recent headlines including the mobile payment system's partnership with Square and its expansion to the United Kingdom.
Despite its expansion and partnerships, however, many retailers are still skeptical of the mobile payment system. This skepticism stems from general uncertainty revolving around the mobile payment industry, including the three reasons featured below:
1. Lack of Customer Interest
Although big-name retailers like Macy's, Whole Foods and McDonald's were quick to offer Apple's mobile payment system across their brick-and-mortar locations, independent retailers have been more apprehensive. One reason for this is because they have not been pressured by their customer base to adapt the technology.
In fact, a recent study from LightSpeed reveals that only 9 percent of the independent retailers surveyed currently accept Apple Pay. Moreover, 40 percent have no plans to ever accept Apple Pay due to a lack of interest from customers. This lack of consumer demand is not that surprising, as a 2015 study from Verifone and Wakefield Research found that half of consumers polled were unfamiliar with mobile technologies like near field communication (NFC) and mobile wallets.
Another reason retailers are skeptical about implementing Apple Pay is because of the numerous other mobile payment options that are also available (or will be available soon), such as Google Wallet, Samsung Pay, Android Pay or CurrentC.
Google Wallet, for instance, works with NFC readers, which retailers can get from their point of sale (POS) terminal system provider. Samsung Pay, on the other hand, is a mobile payment system launching later this summer that works at nearly all brick-and-mortar stores because it is compatible with NFC-equipped terminals as well as traditional credit card readers. This is because the solution leverages Magnetic Secure Transmission (MST) technology that allows phones to emulate a typical card swipe at credit card readers. Also launching soon, Android Pay will work with contactless terminals, while CurrentC is a payment app that has been developed by the Merchant Customer Exchange (MCX). MCX is a group of major retailers like Walmart, Target and CVS looking to shake up the payments industry. According to the group, CurrentC will make checkouts faster, more secure and enable merchants to integrate their loyalty programs and promotions into the app.
With all of these options, it is no surprise that some retailers are holding out to see which mobile payment technology rises to the top before making a decision for their own brick-and-mortar location.
Last but certainly not least, some retailers are hesitant to implement Apple Pay due to implementation concerns. In fact, a recent Reuters' study reveals that retailers are concerned about the cost of technology to facilitate the payments as well as the lack of access to data generated by Apple Pay transactions.
According to Apple, retailers must have a contactless payment-capable POS terminal in order to accept Apple Pay. This can be done by the retailer contacting their current payment provider and requesting the ability to accept Apple's mobile wallet. Retailers that currently have an NFC-enabled terminal should also contact their payment provider to verify their POS setup can accept Apple Pay and that the functionality is enabled. It is also important to note that once setup, Apple does not charge any additional fees to merchants accepting Apple Pay.
Apple Pay also aims to keep its users' information private, which may be less than ideal for merchants who like to store customer information to create more personalized marketing experiences. In fact, Apple notes that merchants only receive information that consumers authorize to share, such as name, email address, billing and shipping address. Other than that, Apple Pay retains only anonymous transaction information that is not tied back to customers.
While all of the aforementioned concerns are valid, one thing is for certain - mobile payments are rising in popularity. Although this functionality may not be a must-have for brick-and-mortar retailers yet, it is a good idea for retailers to get prepared by researching all of the available options, surveying their customers and talking to their POS terminal system provider about implementation.