MOBILE PAY IS HERE TO STAY
AS APPLE’S VERSION GAINS TRACTION, FIRMS LARGE AND SMALL GEARING UP TO ACCEPT IT
It’s official: We live in a world where it’s possible to go grocery shopping without a wallet. Actually, that’s been true for quite some time — various mobile payment systems have allowed consumers to make purchases with their smartphones for years.
But when Apple launched Apple Pay last fall, the idea seemed to captivate the world. The immediate response was significant, with a bevy of financial institutions — American Express, Bank of America and Wells Fargo among them — signing on to participate in Apple Pay, and major merchants like McDonald’s, Macy’s, and Whole Foods agreeing to accept it. Apple reported more than 1 million Apple Pay activations within three days of the launch, and CEO Tim Cook reported last week it now accounts for $2 out of every $3 spent via “contactless” payments. Apple touts it as a simple and secure way to conduct transactions. The research firm ITG also has found strong early adoption of the Apple technology. It “has the ability to significantly transform the mobile payment space,” according to an ITG news release.
But don’t expect to permanently stow those credit and debit cards — at least not for a while. While Apple’s website says consumers with an iPhone 6 or the forthcoming Apple Watch can use the technology “to pay in hundreds of thousands of stores accepting contactless payments,” it specifically names just 43 retailers — all large chains like Staples and Sephora.
Many smaller, local businesses aren’t yet equipped to handle such payments.
“All the stuff sounds so easy, but it’s really only the megachains that can often start off with it,” said Jean Bernstein, CEO of Albuquerque-based sister companies Flying Star and Satellite Coffee.
The company closed its Santa Fe and Bernalillo Flying Star restaurants on Friday and filed for Chapter 11 bankruptcy court protection, although it intends to continue operating its Albuquerque locations.
While Bernstein said she’s intrigued by mobile payment technology, she said the necessary system upgrades have her holding off for now. It can cost a merchant $300-$500 per device to install the necessary point-of-sale systems, according to The Wall Street Journal.
Bernstein said her previous attempts at early adoption of new technology have not always gone well, like the time she tried a Palm Pilot-based inventory system. (“Don’t get me started,” she said. “That was the biggest waste of money ever.”) Therefore, she plans to sit back and watch Apple Pay and similar systems for a while longer before making any expensive commitments, even though she senses the shift is inevitable.
In stores, Apple Pay uses a technology called nearfield communication, which allows mobile phones to communicate with other devices at close range. Many Android phones already have a near-field communication antenna, but iPhones have not until now. Users pay by holding a phone close to a contactless reader with their finger on the touch ID fingerprint system.
Only the most current Apple devices support the system — in the phone realm, that means iPhone 6 — and consumers must link their device to credit or debit cards from a participating bank.
Apple has touted the privacy and security features of its service, which uses a sophisticated encryption system to let users charge purchases on credit-card accounts without having to show their card or account number.
Whole Foods has accepted Apple Pay since its debut, including at the grocery chain’s two Albuquerque stores. The company has the appropriate point-ofsale card readers needed to accommodate Apple Pay and has trained staff on it. Heather Larrabee, a Colorado-based marketing coordinator for Whole Foods’ Rocky Mountain region, said implementation within the five-state region has proven glitch-free.
While the technology is billed as a way to expedite the checkout process, Larrabee said that’s just one reason Whole Foods signed on. It’s mostly about customer experience. “Apple is a brand that people really admire and certainly we do as a company; they’re always on the cutting edge and they design and transform people’s lives with their products,” she said. “If there’s something new and beautiful and it saves time and creates a cool experience, that is, for us, the focus of the business.”
Walgreens accepts phone payments nationwide, a spokeswoman said. That includes the three-yearold Google Wallet, though such payments chainwide doubled with the launch of Apple Pay.
“We’re providing choice and access, and we want to provide customers with the most frictionless and ultimately convenient experience — customer choice is everything,” Walgreens spokeswoman Mailee Garcia said via email.
It’s unclear just how many local Albuquerque merchants accept Apple Pay, though it’s likely that the number will keep growing.
Yashoda Naidoo, owner of the three-location Annapurna’s World Vegetarian Cafe, said she expects to have the technology in place at her eateries within the next few months. “Today, everybody wants to pay with their phone,” she said. “They want to carry one thing.”
Albuquerque’s Page One bookstore may upgrade to the necessary point-of-sale machinery by this summer, according to owner Steven Morado Stout. And it’s not necessarily to meet existing demand — Stout said “just a couple” customers have asked about it.
“I just think any easy payment method is worth trying,” he said.