Apple Pay in-app transactions rapidly expanding beyond NFC payment terminals

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in iPhone
App developers are increasingly adopting Apple Pay as a fast, convenient way to enable purchases, often as an alternative to standing in line at a store's cash register or manually entering in billing and shipping information.


BlueApron's in-app Apple Pay


Apple Pay is often thought of as an alternative to swiping credit cards in stores (where it recently exceeded 2 million locations). However, Apple Pay acceptance within apps is also rapidly expanding--accelerated in part because it doesn't require any special NFC hardware terminals, just a minor code update by developers.

A report by Ian Kar for Quartz highlighted Apple Pay's use in apps as quietly making "serious progress in mobile commerce," citing data from Piper Jaffray analyst Gene Munster who described "an acceleration in the number of apps that accept Apple Pay" as having reached an "inflection point."

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Apple Pay within apps requires only a user's approval via Touch ID, greatly simplifying the typical online purchase experience that involves typing in credit card information, then entering a matching billing address.Customers using Apple Pay were 92 percent more likely to complete their transaction

Online customers are often frustrated enough during online checkouts that they abandon their shopping cart without buying anything. Apps supporting Apple Pay report that the faster, streamlined payment option results in a significant improvement in order completions.

Men's clothing shopping app JackThreads was cited in the article as noting that customers using Apple Pay were 92 percent more likely to complete their transaction.

Bypassing the payment terminal with Apple Pay



In addition to Apple Pay apps that parallel a web-based online shopping experience (including B&H, Best Buy, Groupon, Staples, Target and Zappos), a variety of new app-based services have also adopted an in-app Apple Pay experience (including AirBnb, Easy, Eventbright, Hotel Tonight, Kickstarter, Lyft and Uber).

There's also a new hybrid model for online ordering in physical stores that's using in-app Apple Pay to streamline purchases. Apple's own retail store app, for example, allows buyers to complete a transaction without waiting for a register or an store associate with an EasyPay card swiper.




Apps for Starbucks, Panera Bread and Dunkin' Donuts similarly let customers pay in-app with a touch of Apple Pay, and apps such as Downtown and Yelp's Eat24 let buyers order and pay for food at a variety of participating restaurants using Apple Pay without ever needing to stand in line to order. Services like OpenTable similarly let foodies make restaurant reservations and then pay their food bill via Apple Pay in-app.

Another class of apps making use of Apple Pay involve food or beverage delivery--either for prepared meals (including Caviar, Door Dash, Savory and Postmarks); beer, wine and liquor delivery (via Buttery) or custom created menus for delivery of raw ingredients and recipes for at-home chefs with limited time, including Blue Apron, a company that just released new support for in-app Apple Pay today.

Apple has profiled a wide variety of app titles that have incorporated Apple Pay in a special Buy with Apple Pay App Store page.

Comments

  • Reply 1 of 12
    My 2 fave uses of Apple Pay: (1) vending machines via Apple Watch, when I don't have my wallet, and (2) BJ's Restaurant & Brewhouse that lets you pay self-service at your own table via Apple Pay in their app (after showing you your meal details that the server entered on-premise).
    edited February 2016 brian greennolamacguy
  • Reply 2 of 12
    levilevi Posts: 344member
    My 2 fave uses of Apple Pay: (1) vending machines via Apple Watch, when I don't have my wallet, and (2) BJ's Restaurant & Brewhouse that lets you pay self-service at your own table via Apple Pay in their app (after showing you your meal details that the server entered on-premise).
    Wasn't aware BJ's had this. Good to know.

    brian green
  • Reply 3 of 12
    MarvinMarvin Posts: 14,219moderator
    Men's clothing shopping app JackThreads was cited in the article as noting that customers using Apple Pay were 92 percent more likely to complete their transaction.

    Stats like that should be very compelling for small retailers because conversion rates (the rate of people who complete purchases) in e-commerce are very low. Amazon manages 13%, which is apparently 4x the industry average so ~95% of people who visit a typical online store don't buy anything. Being able to almost double the conversion rate just by getting people to trust the payment method is a huge benefit. Mobile commerce has really taken off, stats vary between 25-50% of all e-commerce transactions:

    https://www.shopify.com/blog/15206517-mobile-now-accounts-for-50-3-of-all-ecommerce-traffic
    https://www.internetretailer.com/2015/08/18/mobile-commerce-now-30-all-us-e-commerce
    http://www.statista.com/statistics/281256/mobile-commerce-as-percentage-of-e-commerce-sales/
    http://appleinsider.com/articles/15/11/27/apples-ios-clenches-783-of-us-mobile-online-shopping-over-thanksgiving-360-more-than-android

    The following documents have some interesting details on how it's being used, particularly the Barclays document:

    https://www.barclayscorporate.com/content/dam/corppublic/corporate/Documents/research/Future-of-m-commerce.pdf
    http://www.criteo.com/media/1894/criteo-state-of-mobile-commerce-q1-2015-ppt.pdf

    The highest usage has been for food, groceries, fashion, electricals and books. It also mentions that it's mostly being done in the home and a high rate while watching TV with a peak usage at 8-10pm. Among reasons given by people to avoid mobile use, 22.3% said they didn't feel secure, 16.5% said it was 'fiddly' using mobiles to do the shopping.

    Around 50-70% of people are using desktops/laptops to do transactions. I think they could get some of those with a Handoff-style payment system (browse on big screen, pay on small screen, even it's the hybrid way like retail stores) once they see how much more convenient it is than getting the cards out but they clearly need to be convinced that it's more secure. It's understandable that people might think mobile is less secure because they might worry about a phone being stolen and used for payments or the simplicity makes them believe there are fewer security checks.

    Pay has only been available for just over a year so it's only available to about 1/3 of Apple's userbase just now. Once they have it in all their device models and everybody upgrades and people become more confident in using it, the usage will grow much higher. It could eventually (years down the line) get to a point where banks can avoid giving you a card at all. They'd just have a system that adds an account to a mobile payment system and you'll never have to worry about card/card number theft.
  • Reply 4 of 12
    A few things I chuckled about when coming across Piper Jaffray's Gene Munster:
    1. Being amazed he can be wrong so often and still have a job.
    2. Being amazed he can be wrong so often and still be quoted.
    3. Since Apple Pay usage in apps is not a prediction, should I believe his analysis since he has been wrong so often?
    I also chuckled about about how Tim Cook and Eddie Cue are steadily moving forward on multiple fronts to get Apple Pay used more and more and more by Apple customers. Staying focused on making progress is the best thing for Apple. 
  • Reply 5 of 12
    mike1mike1 Posts: 1,886member
    levi said:
    My 2 fave uses of Apple Pay: (1) vending machines via Apple Watch, when I don't have my wallet, and (2) BJ's Restaurant & Brewhouse that lets you pay self-service at your own table via Apple Pay in their app (after showing you your meal details that the server entered on-premise).
    Wasn't aware BJ's had this. Good to know.

    Chilis does this too now.
  • Reply 6 of 12
    brucemcbrucemc Posts: 1,527member
    Secure mobile shopping via iPad (since it is majority in the home).  I said this regarding Apple Pay & iPad Air 2 back in late 2014.  Apple should really play up this angle for iPad (in ads, at the upcoming events).
  • Reply 7 of 12
    icoco3icoco3 Posts: 1,459member
    brucemc said:
    Secure mobile shopping via iPad (since it is majority in the home).  I said this regarding Apple Pay & iPad Air 2 back in late 2014.  Apple should really play up this angle for iPad (in ads, at the upcoming events).
    The iPad should have full support for ApplePay to be used by consumers or Point of Sale Terminals.  I see iPads all over being used for POS and having it built in would be a big bonus.

    Since the iPhone 5s has the secure enclave and TouchID, could they open up ApplePay for use in Ecommerce?
    40
    edited February 2016 slprescott
  • Reply 8 of 12
    I use my Watch for ApplePay all the time, and recently used it on my iPad for a transaction at B&H Photo. I normally don't use the app, but on this occasion I did and was surprised to see the P option at the bottom of my transaction.

    This is really handy, as not only does the merchant never see my credit info, but I don't have to fill out any of the info that's normally populated when I sign it. Checkout is a breeze.
    icoco3
  • Reply 9 of 12
    icoco3 said:
    The iPad should have full support for ApplePay to be used by consumers or Point of Sale Terminals.  I see iPads all over being used for POS and having it built in would be a big bonus.

    Agreed.  I was certain that iPad Pro would include NFC, allowing Apple to sell it as a point-of-sale device (Square competitor).  The timing seemed perfect since Apple was also increasing focus on the Enterprise via the IBM partnership.  But alas... no NFC.  Missed opportunity, IMHO.
    edited February 2016 icoco3
  • Reply 10 of 12
    volcanvolcan Posts: 1,789member
    icoco3 said:

    Since the iPhone 5s has the secure enclave and TouchID, could they open up ApplePay for use in Ecommerce?
    There is sort of a way to do it. You still need an app but the app can have a webView that is browsing your shopping site which might be any HTML outputting server platform. If someone clicks buy item then the app calls navigationAction.requst.URL which transfers the shopping request from the webView to the part of your app that calls canMakePayments controller which determines if the device is allowed to use Apple Pay. If not your app needs to send the user to a different webView back to the server which has a traditional e-commerce payment system.

    Swift is able to be used as a limited web scripting language and there are a few third party frameworks or Xcode on Macs that can compile and output HTML, but a regular computer would not be able to access Apple Pay because the call to canMakePayments will return NO since there is no TouchID.
    edited February 2016
  • Reply 11 of 12
    mike1 said:
    levi said:
    Wasn't aware BJ's had this. Good to know.

    Chilis does this too now.
    You can pay at the table/kiosk at Chili's, but I think you have to swipe a credit card in the machine. I don't think ApplePay is an option yet?
  • Reply 12 of 12
     Meanwhile  growth continues in CONUS retail stores.   I just discovered that Albertsons grocery stores accept Apple Pay out here in California 
    edited February 2016
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