Back in July, Apple announced that its newest technology, Apple Pay, had become available in the UK. The technology is a form of contactless payment that allows users to use their iPhone 6, iPhone 6 Plus, iPad Air 2, iPad mini 3, or iWatch to make purchases both online and in-store.
Now the majority of leading banks are on board with the new technology, Apple Pay has the potential to completely transform the way in which consumers pay for goods and services, as well as evolving how brands and businesses engage with their customers.
So what’s all the fuss about?
The new technology allows shoppers to purchase anything from a loaf of bread to a new pair of shoes with just their mobile phone. And since its launch, the rise in popularity of contactless payments generally has been significant – the UK Cards Association announced this year that payments on contactless cards almost trebled in 2014.
And for cautious consumers with privacy concerns, Apple has promised that Apple Pay is one of the safest forms of payment available. To authorise a payment, customers will need to use a fingerprint scanner and the purchase will only be verified if their unique fingerprint is a match. Users are also given a unique ‘device account number’ that is stored in the device’s chip – this ‘tokenises’ the card number, meaning that the shop vendor is never given access to the user’s personal information. The only thing that will be given is the individual number that Apple has given the user.
Brands benefitting from Apple Pay
It is not just consumers that can benefit from Apple Pay, the service also offers a great opportunity for brands to gain valuable insights about their customers – as it is particularly useful for collecting customer data.
Interestingly, Apple announced that it will not be collecting customer data for itself using Apple Pay – instead, that the information will only be shared between the customer, merchant and bank. For brands, this is great news as it means that they can aggregate customer data collected across multiple touch points, such as online and in-store. This has been something previously considered by digital marketers to be extremely tricky, as tracking customer movements from one channel to another was near impossible. The vast amount of customer data that Apple Pay can help collect can then be used to build an accurate profile of a customer based on individual spending habits. This can then be used to personalise marketing strategies so that relevant and useful content is offered to customers.
And as well as collecting customer data, there are a number of other elements to Apple Pay that are extremely useful for digital marketers:
Passbook and the latest iOS update
With the latest iOS9 update, the Passbook app, where Apple Pay sits, will be upgraded to a new app called ‘Wallet’. Wallet is designed for users to input as many of their credit and debit cards as they wish, and have all their information stored in one place. And although one card needs to be selected as the default card for payments, all of the cards in the Wallet can be used at a checkout.
The new app also allows users to access non-default cards and loyalty cards directly from the lock screen, with just two taps of the home button. This presents a great opportunity for brands to increase customer loyalty as users can link their bank up with all of their loyalty cards on their smartphone. This helps brands collect even more valuable customer data and means that customers no-longer need to carry around multiple cards.
And more on loyalty…
Not only can brands gain from Wallet users being able to keep their loyalty cards in their mobile – making them more likely to use loyalty schemes in the first place – brands can offer things like cash back offers for consumers who pay through Apple Pay. In the US, credit card company Discover Card is offering a huge 10% cash back to consumers who use its card with Apple Pay before the end of 2015. It’s a big investment, but it is proof that brands are really buying into this new method of payment.
As payments move online, so do receipts. And this online proof of purchase is a great opportunity for digital marketers to engage with customers that have already bought a product or service. When it comes to e-receipts, 20 per cent of the space is given to promotional content and so digital marketers can use this space for whatever they see fit. It’s an opportunity to provide direct links to social media pages, plug a new promotional offer or even just advertise a 10% discount code – consumers are likely to be much more receptive to this than even just a normal email marketing mail-out.
Contactless payments are fast becoming the dominant method of payment, and with the introduction of Apple Pay we are likely to see a huge jump in the amount of people adopting these services. For brands, it would be wise to get ahead of their competitors and begin utilising the new technology sooner rather than later in to learn more about their customers and engage them with targeted marketing messages.