In its second year, Apple Pay is ready to cash in

It's already jumped the ocean and it's about to jump into thousands of mom-and-pop stores too. Dan Moren is pleased.

square reader transaction

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The Apple Watch may have gotten a lot of the focus in this week’s quarterly earnings call, but I was more excited by the few tidbits we got on one of my favorite features: Apple Pay.

I love Apple Pay. In particular, I end up using it at the grocery store and I’ve probably fielded more questions from the cashiers there than anyone else—particularly when I use the Apple Watch. Honestly, my only real complaint is that I wish Apple Pay were available in more places that I frequent. But I’m hoping that if the latest developments in the payment service are any indication, Apple Pay is still in its infancy, and has a long way to go.

He may ride forever

CEO Tim Cook drew particular attention to the recent launch of Apple Pay in the UK, where it was accepted in 1.25 million locations on day one. Far better, however, was that it was also being used by travelers on the London Underground and Overground systems.

I visited London just a few months ago, and managed to find my way around the Underground without too much trouble, but the idea of using Apple Pay makes me want to turn around and head right back across the pond. (I know, twist my arm, really.)

apple pay london underground thumb800

London calling? Apple Pay can take you Underground. 

But what really has me psyched is Cook’s followup comment: “We hope this will be a model for other public transportation systems around the world.”

Yes, please. I love the idea of Apple Pay for my public transportation needs. Right now, my local transit agency, the MBTA, uses a refillable debit card, not unlike many other public transportation systems. That works just fine most of the time, but it has its annoyances, like when you’re running late and realize that you don’t have enough bus fare or cash on you. It would be far handier to just be able to tap my phone on the terminal and have my fare deducted directly from my bank account.

It’s also one less card that I have to remember or carry around with me, and that’s no small thing, as my overburdened wallet will attest.

Square away

I’m also intrigued with the fact that Apple is working with payment processing company Square to roll out an Apple Pay-compatible reader later this fall. The announcement was first made back during the WWDC keynote in June, but Cook referenced it once again in his prepared statement this week.

This, to my mind, is one of those perfect matches. Square’s not the only game in town when it comes to payment processing for small businesses, but it is one of the pioneers and one of the most prominent. I’ve had three of the company’s tiny magnetic swipe readers over the years, and they’ve proved incredibly useful for collecting money from the dues-paying members of my ultimate frisbee team. (I’ve been trying to convince more of them to switch to Square Cash, with mixed success.)

square reader primary Square

Square's reader should dramatically increase the number of places we can use Apple Pay. 

My local coffee shop already uses a tablet-based point of sale system (not Square, however), and my hopes are high that it and other small businesses will move quickly to adopt Apple Pay and similar NFC-based payments, whether it be via Square or some other point of sale system.

And, in fact, Apple Pay couldn’t come at a better time, thanks to the imminent transition to more secure forms of payment, such as chip-based credit cards. Starting in mid-October, the liability for fraud on magnetic swipe transitions at most retail locations shifts from the card issuer to the retailer itself. That’s a big incentive for stores to switch to terminals that accept cards with embedded chips or NFC payments—such as Apple Pay.

Chip cards, widely used in many countries overseas, are still rolling out slowly here, but when compared to the ability to pay with one’s phone, they start to seem positively antiquated. Smartphone saturation, meanwhile, has probably outpaced smartcards.

App-ortunity knocks

One thing that didn’t get mentioned in Cook’s remarks was the roll out of Apple Pay inside iOS apps. That’s something I’ve encountered surprisingly little of, and would like to see a whole lot more. In fact, the only app-based Apple Pay purchase experience I can recall off hand was rolling over at 3 a.m. a few months back to order my Apple Watch via the Apple Store app. Thanks to Apple Pay, all I had to do was press my thumbprint on my iPhone’s Home button, making it about as pleasant a purchasing experience as one can have at three in the morning.

apple pay in apps Apple

Apple Pay in apps frees you from the worry of how many stores have your credit card on file—and when they'll be hacked.

I’d guess that a lot of the holdup there is that many of these online services have established their own payment processing systems over the years, and thus might be reluctant to turn the keys over to Apple. I’m sure being able to keep people’s credit cards on file—which isn’t possible the way Apple Pay is set up—is no small part of it either.

But given how seamless and simple the process is, I can only hope that more and more apps will continue to adopt Apple Pay, recognizing that it’s a great way to make it even easier for consumers to pony up.

Paying the piper

Apple Pay’s off to a solid start, there’s no question, but it’s got a long way to go. Reinventing payments may not be Apple’s core business, but it’s definitely one of the most ambitious projects that the company has ever attempted. Here’s hoping that a few years hence paying for things with our smartphones will seem as natural and commonplace as handing over a little plastic card does today.

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