3 Reasons Apple Pay CANNOT Dominate the Mobile Payments Space

So, have you tried out Apple Pay yet?  (I didn’t think so)  If you answered “No” you are in good company.  So far 6 out of every 1,000 Americans has tried Apple Pay and those that have tried it have been either amused or annoyed but not amazed.  Here is a link to a recent article that outlines the real Apple Pay statistics and they are certainly not anything to write home about.  Having said all of this, let me say that I am an Apple enthusiast!  I am an early adopter and I love technology.  I am sitting here with my iPhone 6 and at the end of this article, I will give you three reasons why you should sell Apple Pay acceptance to your merchants.  When I think, “Why haven’t I tried Apple Pay yet?”  There are two reasons I haven’t tried it and I am going to guess that these are the same two reasons no one else is trying it.

#1 – I am not sure where to go?  I honestly have no idea who accepts Apple Pay in my area.  Some of the stores Apple has on it’s list are not yet set up to accept it, or if they are, they haven’t told their employees.  Reason #2 is that there is no reason other than pure curiosity for me to try it out.   In other words, why on earth should I try out Apple Pay?  It doesn’t save me any money, I don’t feel it is that much more convenient or secure, there are no special loyalty rewards tied into it, so why should I use it?

I do recognize the benefits in terms of security and convenience but my point is that these are small advantages and in order for me to want to take advantage of them, most of the places I shop need to accept Apple Pay, otherwise the extra time it takes to explain to the cashier what I am doing or ask if they take this form of payment is just too big of a barrier to overcome.  This is bad news for Apple.  I am the CEO of a processing company with an iPhone 6, I love technology and I just haven’t yet felt the motivation to turn on and try Apple Pay!

So, today I want to share two things with you.  First of all, here is a short list of why Apple Pay CANNOT Dominate the mobile payments space and then, in an ironic twist, I am going to share why you should pitch Apple Pay and our new free terminal that you can sell to your merchants.

3 Reasons Apple Pay CANNOT Dominate the Mobile Payments Space:

#3 – They are too late.  Trying to dominate the mobile payments space at this point is just not going to happen.  There is no way that in 5 years, more than 50% of American shoppers will have an Apple device that is Apple Pay and there is no way this 50% is going to use Apple Pay 100% of the time, so it is literally impossible for them to dominate.

#2 – They are not trying to dominate or at least their business model isn’t shooting for domination.  Apple has never succeeded at dominating anything other than music players.  Their business model is about an amazing user experience enjoyed by those willing to pay for and adopt their unique technology solutions.  Their model is about excellence and high profit margins, not domination.  There is a reason that Walmart and other major retailers want nothing to do with Apple Pay and it is because they do not see it as a technology that will dominate.  I think they could one day achieve the same mobile payments market share as American express.  This is an elite payment card type carried by the few with higher fees, etc.  Many small businesses refuse to accept it, but it is still a major player.  If I had to summarize my outlook for Apple Pay in 5 years, I would say it will become the American Express of Mobile Payments, but the Visa and MasterCard of Mobile Payments has yet to emerge.

#1 – It provides no real value to business owners or consumers.  Cool technologies don’t win in the long run.  The technologies that gain long term traction and eventual domination are those that provide an obvious, unmistakable and significant value proposition to all stake holders and Apple Pay provides significant value to no one.  Is there 10% of the population that think it is cool and convenient to have all their card info on their iPhone, sure.  Is there 90% of the population that plans to pay this way without any real financial or other incentive?  No.

So, after all that, why in the world should you pitch Apple Pay?  Here is why you should pitch Apple Pay:

#3 – Pitching anything other than merchant services is a plus.  The worst reason to pitch Apple Pay is that it is more exciting and catchy than pitching lower rates.  We now offer a line of Ingenico terminals for free to our clients that are Apple Pay ready!  Many processors have decided to take advantage of a short term gain by leasing the new machines but we don’t see the point.  Make a quick buck now and have angry customers in 6 months, not worth it!  We are paying a $400 bonus up front on every merchant sold that processes over $5,000 in volume and we are providing a free, Apple Pay ready terminal.

#2 – Apple Pay may not dominate but it will be a major player.  American Express doesn’t have the market share of Visa but I still think business owners should accept AMEX and so I use the same logic with Apple Pay.  It is just one more way to accept money from people and I don’t see how you can turn that away.  Also, I could be wrong and Apple Pay could turn out to be a dominate presence in the mobile payments space, in which case you really want to accept it!

#1 – Make a brand statement.  Selling Apple Pay says that you are in touch with the latest in payment technology and your clients accepting Apple Pay says that they are on the cutting edge as well.  Go online and purchase a bunch of “Apple Pay Accepted” stickers and go walk into businesses to tell them, “I noticed you don’t have one of these up yet, are you not accepting Apple Pay?”

So, to summarize, I think Apple Pay is a lot of hype but once the hype dies down, it will turn into a legitimate payment processing option that will have a respectable, if small market share.  I think accepting Apple Pay is a great idea for small business owners because it will set them apart and I think you should pitch it because it will set you apart.

What do you think?  Make a comment below if you disagree and think Apple Pay will dominate and explain why or if you have a good sales pitch / experience to share on selling Apple Pay acceptance, let us know.

James Shepherd

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