Apple Pay

Mark Gurman, Bloomberg:

Apple Inc. is planning a new service that will let small businesses accept payments directly on their iPhones without any extra hardware, according to people with knowledge of the matter.

The company has been working on the new feature since around 2020, when it paid about $100 million for a Canadian startup called Mobeewave that developed technology for smartphones to accept payments with the tap of a credit card. The system will likely use the iPhone’s near field communications, or NFC, chip that is currently used for Apple Pay.

And:

The move could impact payments providers that rely on Apple’s iPhones to facilitate sales, such as Block Inc.’s Square, which dominates the market. If Apple lets any app use the new technology, then Square can continue accepting payments via Apple devices without needing to worry about providing its own hardware. If Apple requires merchants to use Apple Pay or its own payment processing system, that could compete directly with Square.

And:

Apple may begin rolling out the feature via a software update in the coming months, the people said.

Could be a real Block-buster. (Sorry — I’ll show myself out.)

PYMNTS:

Seven years post-launch, new PYMNTS data shows that 93.9% of consumers with Apple Pay activated on their iPhones do not use it in-store to pay for purchases.

That means only 6.1% do.

The survey was conducted between Aug. 3-10, 2021, 3,671 U.S. consumers.

Apple Pay’s adoption and usage isn’t much larger than it was 2015 (5.1%), a year after its launch, and is the same as it was in 2019, the last full year before the pandemic.

Does this mean Apple Pay usage is saturated? The folks who are going to use it are using it?

The growth in total Apple Pay transactions since 2015 has come almost entirely from more stores having contactless terminals to accept it, more people having new iPhones that can use it, and the overall growth in retail transactions.

And almost none of that growth comes from more iPhone users wanting to use it instead of plastic cards.

Pulling out that credit card is a tough habit to break. I think it’ll take a much bigger marketing push from Apple to change that ingrained behavior. Some sort of carrot, even a temporary one.

For example, when Apple Card came out, it offered a 3% discount if I used the card on any Apple purchases. That’s a solid discount, more than any other card in my wallet, and I was able to set it and forget it for all my monthly Apple services payments (iCloud usage, Apple TV bundle, etc.) That carrot got me into the habit.

Apple does offer regular Apple Pay promo discounts, but none of them are regular enough (at least in my spending patterns) to pull me in, to cement the habit.

If I was a regular subway rider, that’d do it. Or if my favorite restaurants offered an Apple Pay discount, that’d do it too.

I actually love the Apple Watch Apple Pay experience. Maybe once (and if) we’re ever able to move past masks, Apple Pay will start to grow again.

Chance Miller, 9to5Mac:

Apple and Goldman Sachs have once again announced an extension of the Apple Card Customer Assistance Program, allowing users to skip their June payments without penalty.

To ask about this program:

• launch the Wallet app
• tap Apple Card
• tap the “…” button in the upper-right corner
• Tap the Message button and say you want to inquire about the Apple Card Customer Assistance Program

That’s it. They should take it from there.

From the headline linked post about Publix rolling out Apple Pay:

A post on Reddit by user Gabriel2790 shows a picture of an internal document. “Contactless payments are coming to our store! What does that mean,” asks the document. “The most commonly known forms of contactless payment are Apple Pay and Android Pay.”

The document goes on to explain how customers will be able to use mobile phones, smartwatches, and contactless credit and debit cards, as well as what cashiers can expect from the transaction. At the bottom of the document, it shows that the store in question will receive the ability to accept contactless payments on March 31, 2020.

The number of in person credit card transactions is dwindling. But those few that still occur highlights the issue with someone else handling your credit card or placing your credit card in a slot that has held other people’s cards.

When Apple Pay first rolled out, I mostly thought about security and convenience. But now I think about transmission, in this case, of COVID-19.

In these days of fewer and fewer in person transactions, I can only imagine Apple Pay is showing shrinking transaction numbers along with all the other players. But as we emerge from this cocoon, I see big potential for Apple Pay, assuming the value of truly contactless payments is not lost as we rush to return to “normal”.

Apple Pay, failure.

Apple, doomed.

Love a good NY Post headline.

From the article:

The OMNY tap-and-go fare readers have been taking a $2.75 charge from people who have enabled a passcode-skipping Apply Pay service — which allows straphangers to enter the subway with a swipe of their iPhone at the turnstile — even while trying to use a regular MetroCard.

And:

MTA Chief Revenue Officer Al Putre confirmed that “about 30 customers” had complained about “unintended charges when the Express Transit feature of their iPhones is activated.”

And:

An Apple rep said the company has not had the issue in other cities where the Express Transit feature is available.

If 30 customers complained, my bet is there is a pool of people who were charged, but didn’t notice it.

That said, the fact that this appears to be specific to the OMNY contactless fare payment system makes me think this is an implementation issue, maybe a hardware issue, not necessary a flaw in Apple Pay. We’ll see.

T-Mobile:

Today, T-Mobile announced it is the only wireless provider to offer 3% Daily Cash on Apple Card. Starting Friday, September 20, all customers will receive 3% Daily Cash when they use Apple Card with Apple Pay at any T-Mobile store. Combine that with T-Mobile’s current offer — 50% off the latest iPhone 11, iPhone 11 Pro and iPhone 11 Pro Max with 24 monthly bill credits and an eligible trade-in — and customers score serious savings on the latest and greatest.

First things first, if you’re considering a carrier switch, this might be worth considering. As I read it, you have to go to a T-Mobile store. Not clear if this works if you start service on-line or over the phone.

There’s also this:

And this is just the beginning, as T-Mobile will bring Apple Pay to the T-Mobile app and t-mobile.com.

“Will bring”. Not clear when this will happen, but once it does, you should get the 2% Apple Pay bonus when you pay your monthly bill, so add that to the equation.

One final thought on the 3% list. I wish there was an easy way to tell if a merchant I was about to pay offered the 3% bonus. Seems to me, there should be a way, on the Apple Card Wallet page, to tell me the bonus of the nearby terminal. That’s prompt me to use Apple Card in that situation. As is, I have to remember the list of 3% offerers.

Apple:

Apple Card, a new kind of credit card created by Apple and designed to help customers lead a healthier financial life, is available in the US starting today. Customers can apply for Apple Card through the Wallet app on iPhone in minutes and start using it right away with Apple Pay in stores, in apps and on websites. Built on simplicity, transparency and privacy, Apple Card has no fees, encourages customers to pay less interest, offers an easy-to-understand view of spending and provides a new level of privacy and security. This launch follows the Apple Card preview earlier this month, during which a limited number of customers were invited to apply early.

For qualifying customers, subject to credit approval.

In the footnotes:

Apple Pay is coming soon to Uber services like Uber Cash, Scheduled Rides and JUMP.

If you are in the US and have been spamming your Wallet app to no avail, try again now.

• Launch the Wallet app
• Tap the + in the upper right corner
• Tap the Continue button on the bottom of the Apple Pay page
• You should see an Apple Card item. Tap it. Off to the races.

I think Goldman Sachs Bank is going to be incredibly busy today.

David Pierce, Wall Street Journal:

The Apple Card makes quite an impression. The white titanium slab contains no numbers or expiration date—only your name, an Apple logo and the chip. Whip it out of your wallet and it clatters onto a table with a delightful “tink” sound. James Bond might be a Black Card guy, but Q would definitely use an Apple Card.

And:

The card isn’t the point, though. The Apple Card is mostly a digital being, a combination of expense-tracker and bill-payer in an app on your phone. It’s also something of an ad for Apple Pay, the company’s tech for paying with iPhone, your Apple Watch or your Apple ID.

And:

If you have the Apple Card, you get 2% back on purchases you make using Apple Pay—3% when you use the card to buy apps, movies and devices from Apple.

And:

The most surprising thing about my testing was discovering how many places accept the tap-to-pay Apple Pay features. Apple says 65% of all U.S. retail locations now support it.

To me, the Apple Card is a no-brainer, at least to get. It’s free, and offers significant benefits on purchases from Apple. It’s also a solid first credit card for beginners, helps build financial literacy, an understanding of where your money goes.

If the built-in planning tools are not important to you, get the card as a supplement. Use your normal card for benefits and protections not offered by Apple Card, use Apple Card where it works better.

Great review, hits all the highlights.

Matthew Panzarino, TechCrunch:

Apple Card is getting its first group of public test users today. A limited amount of customers that signed up to be notified about the release of Apple Card are getting the ability to apply for the card in their Wallet app today — as well as the option to order their physical Apple Card.

I’ve been using the card for a few days on my own device, making purchases and payments and playing around with features like Apple Cash rewards and transaction categorization.

And:

The application process was simple for me. Portions of the information you need are pre-filled from your existing AppleID account, making for less manual entry. I had an answer in under a minute and was ready to make my first purchase instantly. I used it both online and in person with contactless terminals.

It…works.

Read the article for more of Matthew’s personal experience. Expect to see a wave of articles as the invites continue to go out. Here’s a link to the Apple Wallet Apple Card application page.

I’ll definitely be getting a card, though I’ll also share my card use with my existing credit cards. One thought I have is to use Apple Card when I travel, especially overseas, to minimize the hassle of fraudulent card use.

Yesterday, we posted about JCPenney inexplicably removing support for Apple Pay, both from its retail stores and its mobile app.

Well now we know why.

JC Penney (as posted in the linked TechCrunch post):

A third-party credit card brand made the requirement for all merchants to actively support EMV contactless functionality effective April 13, retiring the legacy MSD contactless technology in place. Given the resources and lead time associated with meeting the new mandate, JCPenney chose to suspend all contactless payment options until a later date. Customers still have the ability to complete their transactions manually by inserting or swiping their physical credit cards at our point-of-sale terminals in stores, an option employed by the vast majority of JCPenney shoppers.

As to whether JCPenney will bring Apple Pay back, the TechCrunch post quotes JCPenney CEO Jill Soltau:

“I think that’s one of the key initiatives that we’ll be working on here in the coming months because we’re not being as strategic in how we speak to the customer and engage with the customer through our pricing and promotion,” she said. “And I would frankly say it might be a little bit confusing, and you might not know exactly when you can get the best value at JCPenney,” the CEO added.

The hint here is the importance to JCPenney of customer purchase data, something they lose with Apple Pay:

Customer purchase data allows a retailer to better target its customers with relevant promotions, as stores are able to collect the customer’s name and card number at point of sale, which they can then combine with other demographic data like the customer’s address, phone and email.

Apple Pay, meanwhile, prevents this level of access — something that customers like, but retailers traditionally have not.

The push and pull of marketing and privacy. Is Apple Pay inevitable? Will customers push back on JCPenney’s move away from privacy? Keeping an eye on this one.

JC Penney tweet confirming the removal of Apple Pay:

https://www.twitter.com/askjcp/status/1119595205559234560

In all the stories I’ve read on this issue, no one seems to know why this happened. And the “We will definitely forward your feedback regarding this for review” comment makes it look like this was either done with blinders on (accounting making a decision that impacted in store customer experience, for example), or done as a trial, waiting to see if there is any pushback from customers.

Read the thread comments. Pushback happened pretty immediately. It’d be interesting to know the reason for this decision. A definite step backwards. Penney pinching?

Apple:

Apple today announced Apple Card, an innovative, new kind of credit card created by Apple and designed to help customers lead a healthier financial life. Apple Card is built into the Apple Wallet app on iPhone, offering customers a familiar experience with Apple Pay and the ability to manage their card right on iPhone. Apple Card transforms the entire credit card experience by simplifying the application process, eliminating fees, encouraging customers to pay less interest and providing a new level of privacy and security. Available in the US this summer, Apple Card also offers a clearer and more compelling rewards program than other credit cards with Daily Cash, which gives back a percentage of every purchase as cash on customers’ Apple Cash card each day.

This Apple credit card lives in your Wallet app. Sign up on your iPhone, it’s available in minutes. And there’s no fee. Ever.

3% cash back on Apple purchases, 2% on all other purchases. And that cash back is available immediately.

The transaction reporting is phenomenal. So much clearer than traditional cards. And there’s a laser etched card for when you need an actual physical card.

Apple:

Target, Taco Bell, Hy-Vee supermarkets in the Midwest, Speedway convenience stores and Jack in the Box are the latest merchants to support Apple Pay, the most popular mobile contactless payment system in the world that lets customers easily and securely pay in stores using their iPhone and Apple Watch. With the addition of these national retailers, 74 of the top 100 merchants in the US and 65 percent of all retail locations across the country will support Apple Pay.

Apple Pay, coming in the next few weeks to all 1,850 Target locations, joining CVS, Costco, and 7-Eleven.

Stacy Cowley, New York Times:

Credit card networks are finally ready to concede what has been obvious to shoppers and merchants for years: Signatures are not a useful way to prove someone’s identity. Later this month, four of the largest networks — American Express, Discover, Mastercard and Visa — will stop requiring them to complete card transactions.

Long outdated tech. Ridiculous that signature checking is still part of the system. Baffling that chip-embedded cards have only recently become a standard in the US.

Would love to see wider adoption of Apple Pay so we can get rid of the security risks that come with those pieces of plastic altogether.

From this Wall Street Journal Journal article:

Users who opt not to input credit-card information for Apple Pay when setting up their phones now constantly see the red circle over their settings icon, indicating their setup is incomplete. Some users also periodically get notification reminders that go away only once they start the enrollment process.

To me, this is a dark pattern, something we happened to write about yesterday in this post, The terrible scourge of Dark Patterns.

John Gruber responds to Mickle’s WSJ article in this excellent Daring Fireball post:

Mickle has a point here. This does annoy people who, for whatever reason, don’t want to set up Apple Pay. There is a way to dismiss the red badge, but it’s not obvious how, because the button you have to tap says “Set Up Apple Pay”. (After that, you tap “Cancel” or “Set Up Later in Wallet”.) It is inscrutably counterintuitive to need to tap a button that says “Set Up Apple Pay” when your intention is to stop being nagged to set it up because you don’t want to set up Apple Pay.

A dark pattern, right? To me, if Apple is going to red dot persist you into signing up or not, better for the user to force the decision up front. In or out, your choice, thank you for your time.

Moving on, Gruber gets to the heart of the Apple Pay issue, adoption:

I do think Apple has a marketing problem with Apple Pay, though. I can tell from talking to family members that a lot of people just don’t see why they should try Apple Pay, because they have no idea how it works or why they’d want to use it. And I think they worry that because it’s new and sort of science-fiction-y it will make their credit card more likely to be hacked, when the truth is the opposite. I think Apple needs more ads that explain and demonstrate the convenience and indisputable security advantages of using Apple Pay instead of a credit card, and the extraordinary convenience of Apple Pay Cash. I can see how a lot of people think, “Eh, I’ll just keep using my credit card” when they’re paying for something in a retail store. But Apple Pay Cash could be enough to get these people to set up Apple Pay.

Coincidentally, Apple just posted a terrific series of Apple Pay ads (watch them here). I think John is spot-on here. The value of Apple Pay is wildly under-appreciated. Though Apple is pushing to brand Apple Pay as a cool shiny, it has not pushed across the message of Apple Pay’s safety, security. Possibly because safety and security is boring. It’s critically important, but it’s tough to make the point in any sort of entertaining way.

The Guardian:

Churchgoers will no longer have to fumble in their pockets and purses for loose change or notes as the Church of England introduces contactless payment terminals in more than 16,000 churches, cathedrals and other religious sites.

Contactless payments have been on trial in 40 Anglican churches since last summer, and from Tuesday they will be extended to all dioceses with the aim of making donations easier and faster. Congregations will also be able to donate via text message.

Fascinating. And inevitable.

There are currently 20 partners on the page. Worth a look. From the fine print:

Offer valid in the U.S. only, while supplies last. Limit one App Store & iTunes Gift Card per partner.

Makes me wonder how these sorts of partnerships work. Is this $5 straight out of Apple’s pockets, a promotion to help push Apple Pay use? Do the partners kick in some or all of that $5 for the exposure on Apple’s site?

PR Newswire:

Deloitte today announced that Chipotle Mexican Grill has selected Deloitte Digital to help transform its mobile customer experience. Deloitte Digital, the creative digital consultancy within Deloitte Consulting LLP, will redesign Chipotle’s iOS and Android ordering apps as part of Chipotle’s focus on digital ordering and enhancing the customer experience. Chipotle plans to launch the new apps in the fall of 2017, with additional channels by the end of the year.

And:

The redesigned mobile experience will also include enhanced payment options including Apple and Android pay.

Whether or not you are a fan of Chipotle, this is a sign of the continued expansion of Apple Pay. Slow and steady.

Tim Hardwick, MacRumors:

Apple today launched a large-scale promotion in China offering special discounts for consumers who use Apple Pay, in the company’s latest bid to counter the dominance of rival digital wallets in the country.

Between July 18 and 24, Apple device owners who use the mobile payment system to make purchases in participating merchants across mainland China will receive concessions of up to 50 percent and as much as 50 times the usual number of reward points for credit cards, according to Apple’s official Chinese website.

I went to the official site and ran the results through Google translate:

Apple Pay brings as low as 50% off this season and up to 50x bank points.

Our lives are often filled with tedious, but do not have to pay so. With Apple Pay, just touch it and hear “bite”, and it will be done quickly and easily. Whether in supermarkets, cafes or shopping malls, payment has become more convenient. From 18th to 24th July 2017, where you can use Apple Pay to pay, you can enjoy as low as 50% discount, as well as up to 50 times the bank credit card points reward 3 in a designated store with a CUP cloud flashover logo.

Not clear to me how this discount gets funded. Is it all Apple or a shared cost with the merchant? Certainly an interesting move on Apple’s part.

The Telegraph:

Jennifer Bailey, the head of Apple’s payments business, said over half of contactless payment terminals in the UK are now able to take Apple Pay transactions of any value. Most card readers had previously been restricted to £30, the default upper limit for contactless card transactions.

And:

Contactless card payments are limited to £30 to prevent fraud, since they do not require shoppers to enter a PIN.

Apple Pay transactions, which are made by holding an iPhone or Apple Watch against a card reader, are approved using the iPhone fingerprint scanner or watch’s biometric sensors. The extra security allows Apple Pay to make payments of any value, but retailers have had to embark on a programme of terminal upgrades to support them.

“We think the majority of the contactless terminals [in the UK] are now limitless,” Ms Bailey said.

Slow, but steady, steady growth.

More users, more iPhones/Apple Watches, more places that accept Apple Pay, fueled by Apple finding more ways for a merchant to take advantage of Apple Pay. I expected steady growth, surprised by that blossoming transaction volume.