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What Apple's announcement means for the payments industry

Paul Henaghan, Managing Director, APAC at ACI Worldwide | Sept. 10, 2014
Apple Pay is expected to affect banks and retailers. Find out how.

We have to take our hats off to Apple, much criticised in the past regarding their cautious approach to mobile payments, who may actually have been wiser (and perhaps somewhat luckier) than we thought — it's clear they've learned from the mistakes of others and have been able to take a more robust approach.

What does this mean for retailers?
Before anything else, retailers need to understand what their goals are in implementing any mobile payments/POS strategy. This has to be a business decision, as opposed to a technology decision. Secondly, retailers should see the current mobile disruption as an opportunity to review their overall omni-channel payments strategy. They would do well to avoid leaping into such a volatile environment, deploying a solution that will not meet their needs, only to find that they require a 'rip and replace' down the road as the market evolves. Mobile programs should be implemented as part of a holistic payment strategy - and at the same time the underpinning payment strategy should support the inevitable evolution around mobile payments.

Only in the context of clarity around their own strategy, should the question around the implications of Apple's strategy be considered. Retailers need to decide when (in the long run it is hardly a case of whether) they want to start accepting Apple payments, what they need to change on the POS, and how they train their staff and help their customers understand the checkout process (and related processes such as disputes). The really good news is that the the payment rails have been left intact. The key change is the acceleration toward NFC and tokenization.

Nevertheless — retailers would do well to remember that while Apple is a significant player, more consumers have Android phones than iPhones. Thus although this week's announcement is big, it isn't everything, and the need to consider the rest of the consumer base is critical. US-based retailers would also do well to consider carefully their support for MCX wallets on its recently-announced CurrentC platform, the newly-rebranded Softcard wallet (formerly ISIS), Apple's mobile wallet, and other players in the market. How can loyalty programs, coupons, offers and other marketing programs best drive consumer behaviour? Which wallet(s) will be most beneficial to their brand and to their customers, and ultimately drive most value down to the bottom line?

As part of an overall review of their payments strategy, retailers should consider the factors required to support the omni-channel payment experience of their customers. But most important is the need for a flexible platform that frees them from being tied to a single vendor for each piece (e.g. mobile wallets, terminal vendors, POS providers, acquirers, and the like). With the right platform, retailers will be better positioned to adjust to the market as business drivers demand.


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