On the day that Apple Pay goes live, SVP Eddy Cue has told the WSJ that the company “has a lot of work to do” on the service, suggesting that initial take-up may be slow – with in-app purchases making up the largest share of transactions in the short-term.
We’re trying to do something that I think is a game changer and it requires a lot of people to play together. There’s a lot to do here and we have a lot of work to do, but it should be huge.
Although the list of retailers who have committed to Apple Pay looks impressive, it is far from comprehensive, with some big names missing – including the largest retailer in the US, Wal-Mart …
The WSJ notes that there are some big gaps on the card side also.
Corporate credit cards or prepaid cards aren’t accepted yet. Neither are retailers’ proprietary credit cards, so shoppers can’t use their Macy’s or Bloomingdale’s cards.
Macy’s, for example, says that around half its purchases are made using its own card, which shoppers prefer as it is linked to the store’s loyalty program. The store says it expects to add its card to Apple Pay “eventually.”
Eddy Cue believes that retail stores will make up only a minority of early usage.
Mr. Cue said he expects the biggest share of early Apple Pay transactions to be in-app purchases.
It may be a full year before we see near-universal acceptance in the US. It’s next October that merchants who fail to upgrade to payment terminals which can read more secure bank cards with embedded chips will become liable for fraudulent transactions. At that point, it would make obvious sense to opt for payment terminals that support NFC payments also.
Apple Pay is currently supported by the iPhone 6/Plus, with older iPhones able to take advantage of the service via the Apple Watch once it goes on sale.
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Makes sense. Maybe he’s curbing expectations in an effort to avoid claims of “DOOM” that will inevitably crop up. I agree, it may take time to ramp up, but once it does it’s going to be BIG.
I never expected everyone to hop on board from day one, especially not in the U.S. which has already been behind the times with card-based payments. But I did expect Apple to be a big catalyst for driving change which I do believe is/will be the case.
But will it be accepted fast enough in the US in this first year for an international rollout next year/next iOS release?
Nearly every place I shop here in Michigan (at least in my area) already has NFC pay terminals, for once I’m glad to see Michigan ahead of the curve!
I thought that too, but in talking with several managers in shops in my area… They have NFC terminals, but the NFC is disabled. So you may find they don’t work.. likely in-fact.
perhaps some, but I’ve used NFC in several stores with my debit card already, and my “regulars” are good to go! :)
I’m excited to try this and see how it works but I still don’t see how to setup for Apple Pay.
its in passbook in 8.1
It works only with iPhone 6 and in some locations. You still need to have cash and credit cards around and swiping a card is not that hard. It needs to be a common standard across devices not just two premium iPhones from Apple. I dont think Apple Pay will take off.
Hell not even Apple gave the ability to the newest iPads NFC, so go figure.
An iPad would be a pretty clunky device to use for payments, so I’m not too surprised by this.
@Ben, that’s what I saw about people who use the iPad as a camera, doesn’t stop them.
Using an iPad as a camera should be illegal …
I carry mi iPad mini everywhere including the grocery store. Tablets from other manufacturers have NFC chips which at volume could be less than $2 each if not less.
NFC can be used to quickly pair cameras with mobile devices, so it’s actually very disappointing the new iPads don’t include NFC for reasons other than ApplePay.
I don’t understand why retailers aren’t all up on this… I never have my retail credit cards with me, and most of the time I just say forget it, it’s not worth taking the time to look up. But with ApplePay I’d always have it with me and would be much more likely to use it!
Why is it (technical) limited to iPhone6?
NFC chip you need for NFC terminal, get it.
But for in-app purchases, if you take the credit card already sticked to itunes, it should work with every device with iTouch.
Besides Touch ID, it needs a chip called the secure element, which is only found on iPhone 6, iPad Air 2 and iPad mini 3 (not on the 5s).
This is an area that i think Apple got it very very wrong…! They should of aimed this service at the EU Countries as the priority rather than the USA, apart from the fact that they roll out to the USA for everything first, it would of made more sense to get it out here where NFC and card readers etc are already more advanced and capable of accepting Apple pay, instead they ignore a market that can and would use the service, for a market that does not even have the capability to run the service… Maybe if they had pushed the EU harder the USA would of seen the benefit faster…
There is a business element that might be missing since Apple is getting a cut of the transaction fees – this will need to be worked out to everyone’s satisfaction until this is roll out – that’s my guess.
I thought that as well, since chip technology is so prevalent in the EU. But I wonder if the EU chip terminals all have NFC or if they predate NFC?
There are chip-and-PIN terminals that predate contactless, but in London at least contactless terminals are everywhere.
I’m looking forward to Apply Paying for my lunch today, but 8.1 isn’t ready for download yet it seems. 8.02 is “up to date” on my iPhone 6.
Ahh… 8.1 downloading and updating now.
People have started talking about adoption speed which is great. I think it’s strange though that I haven’t seen anyone mention that a parallel offering from Android is going to be really important to speed adoption. There isn’t a great impetus to install new more expensive terminals for a small segment of the population (shoppers with iPhone 6/pluses). No one has talked about if these NFC terminals will also support other NFC payment systems.