Apple is ready to let tens of millions of consumers loose with new mobile payment options. Here's what you should learn about the launch.
As expected, today Apple introduced a new mobile payments platform called Apple Pay. The platform consists of two parts — one digital and one real-world.
The digital side includes an app API that will allow developers to build payments directly into their apps for easier and faster checkout. The real-world side uses near-field communications (NFC), allowing iPhone 6 and Apple Watch owners to make payments at supporting retailers just by waving their phone or watch at a sensor. No ID or credit card is required.
Now, the biggest problem with mobile payments thus far has been a lack of adoption by consumers. Plenty of phones have included NFC sensors over the years, and there are some retailers that have supported NFC through one credit card provider or another. However, there has never been an all-encompassing service... until now.
During Apple's presentation today, Apple CEO Tim Cook noted that "most people that have worked on [mobile payments] have started by focusing on creating a business model that was centered around their self-interest instead of focusing on the user experience."
This is the thing that businesses should learn from Apple. Focus on the customer, and the results will follow. This applies to anyone that has to deal with customers, whether internal or external. Simplicity and ease of use is essential to user adoption.
The list of Apple Pay partners is truly impressive. The three biggest payment networks (American Express, MasterCard, and Visa), plus some of the biggest banks (Bank of America, Capital One, Chase, Citi, and Wells Fargo) — encompassing 83% of credit card purchase volume in the US — have agreed to participate. And Apple has signed on a ton of huge retailers that will roll out Apple Pay support across their chains, including Bloomingdale's, Disney Store and Walt Disney World Resort, Duane Reade, Macy's, McDonald's, Sephora, Staples, Subway, Walgreens, and Whole Foods Market — oh, and Apple's own Retail Stores too.
This impressive list of partners will only be the beginning. Every company that takes money from customers will want to sign on to Apple Pay in order to get access to Apple's loyal and wealthy customer base.
USAA, a popular bank with military members and their families, is also involved. "This is one of the most radical changes to the payments industry since plastic credit cards," says David Bohne, president of USAA Bank.
This goes beyond brick-and-mortar. There's an extensive payments API that will go into iOS apps as well. Companies will be able to take payments from customers through Apple Pay within their app. This means that if you try to buy movie tickets or order clothes through an app, you wouldn't need to manually enter a credit card number into every single app you make purchases through. Instead, Apple Pay would take care of that whole process, making life easier for the customer and for the company (that no longer has to worry about verifying credit card numbers or billing addresses).
Tickets.com CEO Joe Choti says that Apple Pay's app API will make for "a seamless, secure, and convenient user experience." Tickets.com powers ticketing services for many different venues, including that of Major League Baseball, its parent company. MLB already announced that fans will be able to purchase game tickets through the MLB At Bat app using Apple Pay when it launches next month. While MLB wouldn't commit to it, I expect the forward-looking league will implement Apple Pay at stadiums around the country for next season as well, allowing iPhone 6 and Apple Watch owners to make purchases of food and souvenirs without ever removing their wallets.
"Apple Pay is the kind of innovative thinking that brings the worlds of online and offline commerce closer together," says Ken Chenault, CEO of American Express.
Remember your users. The greatest product in the world is useless if it's too difficult to use (which would make it, I imagine, not the greatest product in the world). It doesn't matter if you're building an app for an enterprise business or building an expense reimbursement form in Excel. Think of your users, what might make their job or life easier, and do that. The easier it is, the flatter the learning curve, and the better off everyone will be.
Apple Pay is going to dominate the mobile payments industry because it's easy to use, has broad partnerships, and has Apple standing behind it (okay, that helps a lot).
In an email to Apple employees today, Apple CEO Tim Cook noted that the company brings "together the best hardware, software, and services to create a seamless and intuitive user experience," and that sets Apple apart from every other company on earth. It's this simple philosophy that makes Apple the biggest and one of the most profitable companies in the world.
What did you think about Apple Pay? Let us know in the comments below.