Apple expects half of top US merchants will accept Apple Pay by end of 2015
Apple's work to expand the footprint of its iPhone-based mobile payment service continues more than half a year after its debut, and while the company expects to bring a number of large merchants on board before the end of 2015, though it appears to be an uphill battle.
"We've spoken to all of the top 100 merchants in the U.S., and about half will accept Apple Pay this year, with many more the following year," an Apple representative told Reuters. Apple Pay is currently available at more than 700,000 retail stores and self-service kiosks --?like soda machines --?in the U.S., with a Canadian expansion reportedly on tap.
Some merchants are reluctant to cast their hat in with Apple, however. Of the 98 largest brick-and-mortar retailers in the U.S., "nearly two-thirds" told the news agency that they had no plans to support Apple Pay this year, compared to just 4 that pledged to accept it.
"They have been pushing hard and it's been that way for months," a source at one retailer said, despite that company declining to participate. "They have called and tried to persuade us even after we communicated our decision to them."
Many of those surveyed said that there was not enough demand from customers to justify the capital expenditures necessary to add Apple Pay, while others decried the inability to gather customer information during transactions.
"What is the return on investment?" Ahold USA executive Maureen Elworthy is quoted as saying at an industry event. "The [return] is negative." Ahold USA is the parent company of supermarket chains Giant and Stop&Shop, among others.
Another stumbling block --?cited by 19 of the retailers -- is the restrictive nature of their MCX agreements, which prohibit them from accepting any other mobile payment system save for CurrentC before 2016. It's not clear how ironclad those agreements are, however, as major MCX contributor Best Buy is now offering Apple Pay support.
"We've spoken to all of the top 100 merchants in the U.S., and about half will accept Apple Pay this year, with many more the following year," an Apple representative told Reuters. Apple Pay is currently available at more than 700,000 retail stores and self-service kiosks --?like soda machines --?in the U.S., with a Canadian expansion reportedly on tap.
Some merchants are reluctant to cast their hat in with Apple, however. Of the 98 largest brick-and-mortar retailers in the U.S., "nearly two-thirds" told the news agency that they had no plans to support Apple Pay this year, compared to just 4 that pledged to accept it.
"They have been pushing hard and it's been that way for months," a source at one retailer said, despite that company declining to participate. "They have called and tried to persuade us even after we communicated our decision to them."
Many of those surveyed said that there was not enough demand from customers to justify the capital expenditures necessary to add Apple Pay, while others decried the inability to gather customer information during transactions.
"What is the return on investment?" Ahold USA executive Maureen Elworthy is quoted as saying at an industry event. "The [return] is negative." Ahold USA is the parent company of supermarket chains Giant and Stop&Shop, among others.
Another stumbling block --?cited by 19 of the retailers -- is the restrictive nature of their MCX agreements, which prohibit them from accepting any other mobile payment system save for CurrentC before 2016. It's not clear how ironclad those agreements are, however, as major MCX contributor Best Buy is now offering Apple Pay support.
Comments
I've reverted to a cash-only policy for most of my transactions these days. The retailers refuse to get their act together, so I avoid the possibility of being further victimized.
"...others decried the inability to gather customer information during transactions."
Oh, so that means it's not just Facebook and Google that want to know everything about what we're going to do before we actually do it!
Fucking moron. A better customer experience is the return on investment, you dipshit. Amazing how these short sighted douchebags are in executive positions.
""What is the return on investment?" Ahold USA executive Maureen Elworthy is quoted as saying at an industry event. "The [return] is negative." Ahold USA is the parent company of supermarket chains Giant and Stop&Shop, among others."
Fucking moron. A better customer experience is the return on investment, you dipshit. Amazing how these short sighted douchebags are in executive positions.
She runs a store called Stop&Slop, what do you expect?
Exactly WHAT capital investment is required? Merchants WILL be buying new POS terminals by Oct of this year, unless they are willing to accept 100% liability for fraudulent transactions. If the buyer presents a chip/pin card but the merchant ONLY has the old magnetic swipe POS terminal the merchant eats the costs of the fraud (i.e. both money and merchandise). This is all part of the industry-wide agreement that was reached after the string of credit/debit card thefts starting with Target. The capital outlay has NOTHING to do with Apple Pay!
These new POS terminals (chip/pin) ALL come equipped with the hardware (NFC) to communicate with Apple Pay, but that hardware CAN be turned off (it is by default turned on). All that is required for Apple Pay to work from a merchant perspective is the new POS terminal...nothing more.
The only valid complaint is that the merchant looses all ability to glean (i.e. confiscate) information regarding the buyer. I personally find it very offensive that a merchant would believe that they have a right to collect information simply because I choose to make a purchase in their store. If you pay with good old fashioned cash, they are "deprived" of the ability to collect information as well, so why the hate for Apple Pay?
Apple worked with the banking industry to implement a set of technologies (hardware, encryption, software) that the banking industry itself had already created. Apple's magic was delivering it in a consumer device as it was too complex to be implemented in a smart card alone.
I have been soft boycotting (i.e. go elsewhere when possible) merchants that have rolled out the new POS terminals with the NFC feature disabled. I can also state that a number of VERY small merchants that I frequent that have the new lower cost chip/pin POS terminals WERE shocked to find that Apple Pay worked PERFECTLY. They were under the impression that they had to do something special to accept Apple Pay.
Remember that the ONLY way a merchant can refuse to accept Apple Pay is by turning off NFC, as from that point on, the transaction appears as a contactless, verified credit/debit card transaction with all the lifting occurring at the credit card processing centers, NOT at the merchant.
As Apple Pay is more secure than chip/pin resulting is less likelihood of fraud, the banking industry and Apple need to simply pass a small fraction of the avoided fraud expense back to the merchant and the flood gates would likely open as nothing talks like money.
As for the abomination known as CurrenC goes, dig into it further and you will see why I call it an abomination!
Sorry but that ship has sailed. Consumers quite clearly are fine with giving up a level of privacy in return for free services or discounts/rewards.
So, it's not only the dipwad merchants, it's the clueless dipwad iPhone owners who aren't making enough noise demanding Apple Pay support.
I hope Apple persists to the point of some critical mass of public awareness of the advantages of this Apple product.
Most industry forecasters say it will be 5-10 years before the transition to chip & pin is complete, and most banks will not have issued chip embedded cards to the majority of their their customers until well into next year, so merchant liability will be mitigated, allowing many to put off adopting the mandated technology well past the October deadline, thus making ?Pay even more frustrating for unfamiliar customers. Apple is doing the right thing here.
I've used Apple Pay successfully at Sprouts, Whole Foods, Firehouse Subs, Trader Joe's. HEB grocery is rolling out NFC/Apple Pay at my local store this month.
iOS users spend more on apps than Android users. I imagine they would, likewise, spend more overall. Do these merchants not want a customer audience that spends more than average? That's just silly.
Sorry but that ship has sailed. Consumers quite clearly are fine with giving up a level of privacy in return for free services or discounts/rewards.
This. Oh good heavens, this. Ask yourself what makes something "private?" Because it can be used against you to steal (and current laws are ineffective in protecting you)? Because you're embarrassed by it (maybe you shouldn't be doing it)? Or because you think it has value (and we know know we are simply under pricing ourselves)?
The only valid complaint is that the merchant looses all ability to glean (i.e. confiscate) information regarding the buyer. I personally find it very offensive that a merchant would believe that they have a right to collect information simply because I choose to make a purchase in their store. If you pay with good old fashioned cash, they are "deprived" of the ability to collect information as well, so why the hate for Apple Pay?
Remember "RadioShack?" Douchebags even demanded information from cash customers. I had a clerk actually plead with me for my address "so I can get my quota." Online RadioShack clerk stories are...entertaining.
And this is why it's not a priority for the next "free" iPhone to have ?Pay. The iPhone 7 introduction's "free" phone, yes. The 6S companion, no.
Uh, no. This is why it IS a priority. The more people have that Apple Pay enabled iPhones, the more incentive and pressure for merchants to support the standard. How do you think Apple drives he adoption of standard within the industry? By making sure they have a critical mass of affluent consumers using them.
I saw the NFC support sign at Rite-Aid, and Apple Pay didn't work there. I've heard it's not officially supported there but some people have had success. The clerk said several customers have complained about not having Apple Pay. I told them they ought to get it, because I'll go to Walgreen's instead (which does have it, though my last trip there I had a pretty terrible experience).
Ulta has the sign too, and it didn't work there either. The cashier there was saying they keep asking the company to turn it on, because people want it.
Hopefully the complaints will add up eventually and they'll get with it.
Exactly WHAT capital investment is required? Merchants WILL be buying new POS terminals by Oct of this year, unless they are willing to accept 100% liability for fraudulent transactions. If the buyer presents a chip/pin card but the merchant ONLY has the old magnetic swipe POS terminal the merchant eats the costs of the fraud (i.e. both money and merchandise). This is all part of the industry-wide agreement that was reached after the string of credit/debit card thefts starting with Target. The capital outlay has NOTHING to do with Apple Pay!
These new POS terminals (chip/pin) ALL come equipped with the hardware (NFC) to communicate with Apple Pay, but that hardware CAN be turned off (it is by default turned on). All that is required for Apple Pay to work from a merchant perspective is the new POS terminal...nothing more.
The only valid complaint is that the merchant looses all ability to glean (i.e. confiscate) information regarding the buyer. I personally find it very offensive that a merchant would believe that they have a right to collect information simply because I choose to make a purchase in their store. If you pay with good old fashioned cash, they are "deprived" of the ability to collect information as well, so why the hate for Apple Pay?
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I have been soft boycotting (i.e. go elsewhere when possible) merchants that have rolled out the new POS terminals with the NFC feature disabled. I can also state that a number of VERY small merchants that I frequent that have the new lower cost chip/pin POS terminals WERE shocked to find that Apple Pay worked PERFECTLY. ...
Remember that the ONLY way a merchant can refuse to accept Apple Pay is by turning off NFC, as from that point on, the transaction appears as a contactless, verified credit/debit card transaction with all the lifting occurring at the credit card processing centers, NOT at the merchant.
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I'm not sure you're correct that the only way a merchant can refuse to accept Apple Pay is by turning off NFC. My local chain drugstore has NFC terminals, my iPhone recognized the terminal and the terminal recognized that the phone was there, and at first it seemed like the transaction went through (according to the phone), but the transaction was refused. I then used a debit card and was concerned enough that I checked my account to make sure they didn't charge me twice (they didn't). So the NFC seemed to be working, but Apple Pay wasn't.
But all of your other points make sense.
I think that the holdouts will no longer holdout once their competitors come on board. Many businesses used to refuse to take AMEX, Discover or debit-only cards, but eventually almost everyone did.
Personally, I care less about the big chains than about the local restaurants and merchants, etc. And how it's going to work in restaurants that today take your card to a terminal 'in the back' is an issue. But until Apple Pay becomes almost universal, it doesn't do me all that much good (aside from the security benefits) because I still have to walk around with credit cards in my wallet. The promise of Apple Pay is that I can stick my driver's license and a few bills in my cell phone case and leave my wallet at home. And what I'd also really like is for ATMs to work with Apple Pay. Otherwise, I still need to walk around with a bank card.
As far as the retailers collecting information, I resent this as well. That's why I don't use any of those discount tags - instead I ask the cashier to put their card through for me. Doesn't work everywhere, but it works in most supermarkets. While I don't think there's ever been a practical negative impact from all the info they've collected on my purchases, I'm still a bit paranoid about it - I can picture the day when the health insurance company wants to charge me a higher rate because I've become overweight and they can track that I purchased tons of fattening food over the years.
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In spite of all the recent security breaches and the credit card companies constantly sending me replacement cards (now with chips), I can only think of one time in the last 30 years when I found false charges on my credit card. The charges were under $30 from a bar in Texas, so I have to think that the account number was manually entered incorrectly, but they happened to get the check digit right and it happened to be my card number. The credit card company immediately took the charges off.
And my free security monitoring as a result of those breaches has never revealed anything either. So I have to wonder what the thieves are really doing with all the account info that they steal.
I've used Apple Pay successfully at Sprouts,
I use it at Sprouts as well, but the other day I had to return something and they made me swipe the credit card. I suppose they are able to record my personal information because of the swipe. I returned some merchandise at Home Depot (when they still accepted ?Pay) and I didn't have to do anything, it just went back on the card. I have seen a number of clerks that are clueless about ?Pay. Perhaps Apple needs better training and support for the proper usage and protocols.