As exciting as Apple’s annual World Wide Developers Conference can be, the news from Monday’s keynote seemed on its face sort of ho-hum for payment facilitators. The new abilities within the upcoming release of the iOS 10 mobile and macOS desktop software updates are for now merely more options that PFs have to consider along with their merchant clients. The long term view of these Apple payment moves is scintillating however, given the higher incomes of iOS and MacOS users and the huge gap between what they spend on apps compared to Android users.
The features will allow merchants to add Apple Pay to their Safari browser shopping portal’s payment suite, and for merchants to develop apps for iMessage users to use for P2P transactions. In the short term, there are challenges. Shoppers with desktops must have not only a Mac, for communicating with the iPhone or Apple Watch that authenticates the payment, but the Safari browser that Apple owns.
These mandatory steps narrow the shopper population, who will also have to change its ingrained online shopping behavior to use Apple Pay. Last but not least, merchants will have to sign up for Apple Pay and update their websites.
Rick Oglesby, president of AZ Payments Group and a Partner at Double Diamond Group, said although the Safari payment option is a move into PayPal territory, for now PayPal has little to fret over.
“It’s obviously closed to Apple only, so it won’t be taking down PayPal any time soon, but it could significantly cut into PayPal’s on-Apple volume,” Oglesby said. “It’s not time to sell your PayPal stock yet.”
Oglesby said most PFs don’t have direct consumer businesses like the one PayPal has so Apple Pay will continue to be one more button that consumers can use to pay merchants served by PFs and/or any other traditional acquirer.
“PFs and acquirers will need to evaluate this new payment vehicle and determine if it’s a good fit for their business,” he said. “If it is, they should move to support it. That being said, they don’t need to scramble on this, it will be a while before consumers demand to pay with Apple Pay on-line, assuming they ever will demand it.”
Similarly, with Apple allowing developers to create payment ability within iMessage, PFs need to be aware of the option for its merchants. Facebook is moving toward allowing businesses to reach users through messaging as well, Oglesby said. Square Cash is in iMessaging right now.
“The Square payments service is really just a small part of the greater Apple strategy relating to iMessage, which is to enable iMessage to become a way for consumers to communicate with any person or business, as well as to transact with them,” Oglesby said. “For PFs, it means that they have a new mechanism to serve their merchants as well as to accept payment on behalf of their merchants. But it will take time to develop.”