Anyone who’s been in business long enough will have seen more than their fair share of ‘The Next Big Thing.’ You know, that new, revolutionary technique, method or widget that was meant to revolutionize everything, only to fade away to irrelevance. Now, ever the critic, you may be wondering about the longevity of Apple Pay. Everyone’s talking about it, so what does it mean for your business? Should you get in on the ground floor?
On the surface, at least, it appears that you should – right? Large retailers are jumping on the bandwagon – Macy’s, Walgreen, and Toys ‘R’ Us – and I just watched a 14 year old tap her phone at Starbucks to pay for her pumpkin spice latte. It must be the wave of the future for payments…right?
Cold Hard Facts on Apple Pay
For small business owners, Apple Pay – which can currently only be used by iPhone 6 and iPhone 6 Plus users – presents a bit of a conundrum. Why? The start up cost for installing a reader for systems like this can be anywhere from $300 to $500, and that’s just the equipment. Take training and operational adjustments into account and that’s a lot of upfront investment for something so new.
However, almost 30% of US customers are predicted to have have access to Apple Pay by the end of 2015. In a recent USA Today article, Apple analyst Tim Bajarin predicted 30 million Americans will have an iPhone 6 or iPhone 6 Plus by the end of 2015. In theory, that’s 30 million people who will be able to use Apple Pay. This is likely why it’s already available in 220,000 retail locations nationwide. And, with iPhone 6, 6 Plus and 6s utilizing NFC technology, it might be easier to use than you think.
If you’ve already made the leap (we hope you have) and have a a new NFC EMV compliant card reader in your salons, you might already be equipped to accept Apple Pay. If you are cringing as you read thinking about the new hardware you’ve just placed in your salons to comply with new EMV regulations, fear not, there is a good chance you may have this new NFC reader technology in your new hardware. Contact your POS or merchant services company to get all the details.
Yeah, but is it time?
According to a report by Infoscout in January 2015, only 9% of iPhone 6 users have actually tried Apple Pay and ‘…despite its hype within the tech community, Apple Pay still has a lot of ground to cover. Out of all Apple Pay-eligible transactions on Black Friday, the new NFC-powered mobile payment method was used less than 5% of the time.’
Another report found that 6 out of every 1000 customers that walk into your salon will use Apple Pay.
Those numbers aren’t encouraging but Apple would argue that there is possibility for growth reporting that using Apple Pay is more convenient for customers, which is a common driver for many things we do these days, e.g. online booking, mobile loyalty clubs and memberships to name a few. But how convenient is it for you? Is it cheaper than credit cards? No. It’s still the regular 2-3% per transaction.
Before completely dismissing Apple Pay, remember that NFC technology has been around for a while and continues to grow as hardware catches up with software. Apple Pay is just one of many payment systems that will exist in the future. Those without Apple devices don’t despair, Google is a front runner, too, with Google Wallet as well as Android Pay.
With new bleeding edge payment systems like this, you’re not going to lose money by not adopting, so you can afford to take a ‘wait and see’ approach as you’re not putting anyone out by not allowing it. Can you imagine not taking credit cards today?! Only five years ago I was writing blogs talking about consumer expectations for credit cards! With mobile payments, however, it’s still in early stages. The vast majority of customers will use cash or card like they do at present, but once numbers start surpassing the minority mark it may be time to re-evaluate.