Mobility

Revamped Apple Pay could make the web a first-class citizen on mobile

Apple Pay should plump up Apple's services business, but it may do even more for making the web look, and convert, more like an app.

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Image: Apple

The web dominates the desktop, but remains an also-ran in mobile. Though the average monthly audience for mobile web is growing faster than mobile apps, apps continue to be ground zero for successful mobile strategies as brands are better able to deliver rich experiences in apps.

With Apple Pay coming to a web browser near you this year, that could change.

Instead of mobile web serving as a huge, porous net that lightly pulls in casual customers to interact with a brand—with apps doing the heavy lifting of converting interest into cash—Apple Pay on the web promises to turn casual interest into real mobile commerce. Mobile payments have so far failed to deliver on their promise, with BI Intelligence revising its 2016 projection from $129 billion to $75 billion.

SEE: Apple Pay: The smart person's guide (TechRepublic)

But, by blending the seamless beauty of Apple Pay with the mobile web, Apple promises to make the web look and convert much more like apps.

No, thanks. I'm just looking

Despite some early doomsayers projecting that apps would kill the web on mobile devices, the web is alive and well. In fact, as comScore Media Matrix data uncovers, the average monthly audience for the top 1,000 mobile web properties is growing far faster than that of the top 1,000 mobile apps:

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However, when it comes to turning all those eyeballs into wallets, apps trounce the mobile web. Fred Wilson, a noted venture capitalist, details this in an aptly-titled post, Mobile Web Is Top Of Funnel, Mobile App Is Bottom Of Funnel:

The mobile web is the window of your store. Users window shop on your mobile website. Getting them to download and install and use your mobile app is like getting them to come into the store. And that's where the action is long term.

But, what if your customers could increasingly pay for items inside the store while gazing at them from outside, as it were? What if window shopping became actual shopping? That's the promise realized by Apple Pay on the web and, as Jason Del Rey calls out, "it's a really big deal."

Apple Pay is the gift that keeps on giving

Though it got off to a sluggish start, Apple Pay has been booming. As Apple CEO Tim Cook detailed in the company's most recent earnings call, "Apple Pay is growing at a tremendous rate, with more than five times the transaction volume of a year ago and 1 million new users per week."

SEE: Apple Pay's best friend? Slow chip-and-dip EMV cards (TechRepublic)

This corresponds with BI Intelligence's finding that while a mere 11% of the US population has experimented with mobile payments like Apple Pay in 2015, that number should jump to 56% by 2020. Apple, not surprisingly, is angling to turn much of that 56% into Apple Pay users. Though consumers have stuck stubbornly to their credit cards, painfully slow chip-and-dip EMV cards make Apple Pay look better and better each day.

Now consumers are getting one more reason to go mobile.

As Gartner analyst Charles Golvin indicates, though Apple talked up Apple Pay on the web in the context of desktop, it's really a boon to mobile:

Certainly Apple Pay streamlines the customer experience when buying on a computer, but inputting personal and payment information is not a huge impediment when armed with a keyboard and mouse (and browser auto-fill capability)....The real payoff for digital commerce marketers is on the mobile Web, where the hassle of filling out the requisite forms is a fundamental cause of shopping cart abandonment and lost sales. Because Apple Pay can transmit all of the information required to complete a purchase, merchants can truly implement a "one click" payment option, close the sale, and then let the marketing team go to work on the follow-through that will ensure the customer loves the product and will become a brand advocate.

The more Apple can entice users to services like Apple Pay, the more hardware it will sell but, also, the more transaction fees it can collect. Apple, which has made billions on apps, stands to make even more by enabling the digital economy to flow through its devices.

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In a previous earnings call, Cook pledged Apple's allegiance to services, reminding investors that "The Services business is powered by our huge installed base of active devices, which crossed 1 billion units earlier this year," and "[T]hose 1 billion-plus active devices are a source of recurring revenue that is growing independent of the unit shipments we report every three months."

To date, those services revenues were driven by apps and app-oriented services like Apple Music. But now, Apple has every incentive to make the mobile web an even better experience than it hitherto has. That's great news for Apple, for consumers, and for the web.

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About Matt Asay

Matt Asay is a veteran technology columnist who has written for CNET, ReadWrite, and other tech media. Asay has also held a variety of executive roles with leading mobile and big data software companies.

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