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Mobile Marketing

App Marketing Conversations: Apple Pay

Alex Walz  //  December 3, 2014  //  8 min read

Apple Pay & What It Means For E-Commerce

In our latest installment of App Marketing Conversations, Apptentive CEO Robi Ganguly (@rganguly) is joined by Ian Sefferman (@iseff)) of MobileDevHQ by Tune and Ryan Morel (@ryanmorel) of GameHouse to discuss their experiences with Apple Pay and its implications on mobile and e-commerce.

The discussion covers the good and the bad of Apple Pay – from its simplicity and ease of use to its current very limited coverage by retailers and credit cards.

With over one million card activations during its first 72 hours, Apple Pay has the potential to streamline mobile commerce on a massive scale while providing retailers with a much greater share of revenue than what they would otherwise receive with the App Store’s 30 percent cut on all digital transactions. Still, Apple Pay and other digital wallets raise some concerns around security, particularly after the recent hacking of Apple Pay competitor CurrentC.

Check out the latest App Marketing Conversations video to hear Robi, Ian, and Ryan weigh in on Apple Pay, and let us know what you’d add to the conversation in the comments below.


Robi: Hello, and welcome to another “App Marketing Conversations”. As always, I’m joined by Ian Sefferman of MobileDevHQ by Tune and Ryan Morel, GameHouse and I’m Robi Ganguly of Apptentive. So we’ve talked about user acquisition, we’ve talked about iPads and the tablets market, in the previous two segments. Make sure you check those out. But we’re going to talk about Apple Pay and what it means for e-commerce this time around. So a few months ago, we talked about Apple Pay initially. Now that you’ve used it, what do you think?

Ian: So I used it this week, at Whole Foods and the experience was really great! The experience of setting up Apple Pay was nice, it was not super-painful. The experience of using it was literally like, take out your phone, hold your thumb down, done. I don’t mean to over-simplify it. I don’t really know what else to say. That was how long it took. How much can I say, it was so simple. It was great.

Robi: That’s amazing. Have you used it yet?

Ryan: I’ve tried.

Robi: Okay, what happened with you?

Ryan: I haven’t been at a place that takes it.

Robi: Okay.

Ryan: Which I think says something in and of itself in the opportunity for e-commerce, right?

Robi: Yeah.

Ryan: You’re going about it every day. Interaction every day. But apparently I don’t buy enough stuff every day to get a place that takes it.

Ian: How many of your cards were accepted?

Ryan: All of them except for one, despite the fact that it was from the same bank.

Ian: Really?

Ryan: Yeah.

Ian: So for me, I basically have an Am-Ex and a debit card and just the Am-Ex was accepted.

Ryan: Really?

Ian: Yeah. I was a little bit disappointed about that, because I’d love to use that, so.

Robi: That’s interesting. Yeah, so I mean, it’s very early in terms of coverage from a store’s perspective and coverage from the cards that they accept. It seems like a lot of money is going to flow through this relatively quickly. Didn’t they already say the number of credit cards they got on file was far in excess of several other competing e-commerce through app services?

Ian: Yeah, yeah. And they didn’t get packed.

Robi: Yet! It’s true, that’s a really good point. So Whole Foods is taking it, who else is taking it? What’s going on here from the companies supporting this perspective?

Ian: So that’s actually a very good question. I think Target accepts.

Ryan: Target, Panera…

Ian: Yeah.

Ryan: CVS, either CVS or Walgreens.

Ian: Or, yeah, one of them and then the other one has their own…

Ryan: It is part of MCX message.

Ian: Right.

Robi: So let’s talk about this MCX thing, right? There are a bunch of fibers out there with a competing initiative. and they pulled their support from Apple Pay. So Walmart’s leading the initiative, is that correct?

Ryan: Yeah.

Robi: Okay, and then, who else was involved? I think CVS, some others?

Ryan: CVS, some grocery store, big grocery store chains, Best Buy and GAP is involved in it, although I doubt GAP is doing this, because I think one of the GAP people was involved with Apple.

Robi: Okay.

Ryan: It’s all retail.

Ian: And what’s their complaint about Apple Pay?

Ryan: I don’t think they have a complaint, I think it’s that they want consumers to use their solution. Well actually, sorry, I believe their complaint is that they don’t get any customer data. So when you use your credit card, you get customer data, and when you use Apple Pay, you don’t, because Apple handles transaction, and the card never leaves the “secure enclave” or whatever of the device. So that’s their complaint.

Ian: Gotchya.

Ryan: I believe.

Robi: Interesting. Well it seemed like for the people I follow that have Apple devices that were talking about this stuff on Twitter and other social sites, that was reason enough to not do business with them.

Ryan: Yeah.

Robi: There are people actively choosing to not go there. Like, “Well, I’m going to go to the places that actually make it easy for me.” They feel like it’s anti-consumer.

Ryan: Yeah.

Robi: Has this mattered to you at all?

Ryan: No, not to me personally. I think it’s going to be really interesting to watch and see what people do. I mean, how many hacks do we need to see? Right? Like, Home Depot, Target, I’m sure there’s been another one, and now this MCX thing ws already hacked, although people might … How many do we need to see before we stop trusting retailers in general with our data? How much money needs to be lost? So I think it’s going to be interesting to see whether these retailers can avoid the wave of consumer sentiment towards things that they can’t control. Like Apple Pay.

Ian: Right, right.

Robi: Yeah, I mean, it seems to me like, you can either fight this or you can say, “I’m going to go and try to make as many things as easy as possible for my customers.

Ryan: Yeah.

Robi: “Why struggle so much to take their money?”

Ryan: Yeah.

Robi: “And in the process ruin my brand and my reputation?”

Ryan: Yeah.

Robi: What do you think, walking around town, doing business on a regular basis, what parts of your life would be a whole lot easier if they had Apple Pay?

Ian: So for me it’s actually the small transactions, right?

Ryan: Yeah.

Ian: I think the transactions under 5-10 dollars that are stupid little things, those are the ones that can be most improved by being sped up and not having to worry about carrying change and stuff like that. Going to the drugstore, I think that’s a big win. Actually, I’d love it for even things like – bad example because I don’t much do it – but things like vending machines or newspapers, kiosks or stuff like that.

Ryan: Right.

Robi: Yeah, I mean it’s a little bit different, but I use the Starbucks app which has my credit card information loaded.

Ian: Yeah.

Robi: So all I do is just scan it when I go to the coffee shop, and yeah. Seven dollars, five dollars, three dollars, paid in two seconds, super-easy, right? Yeah. What about you?

Ryan: So I think, maybe this would be a good segue into what you probably want to talk about, I actually think that e-commerce is where I would like to see it more, especially mobile e-commerce?

Robi: Yeah.

Ryan: Because… we talked a little bit about this before. There’s still a glut of people who don’t have mobile apps and purchasing things on mobiles on sites that are not called Amazon still sucks. I don’t want to put in all my info I don’t want to enter in all my credit card number, because I don’t know it! It’s not on me, right? So I agree with everything he said but I think like, I tend to buy more things on e-commerce, so that’s what I want.

Robi: Yeah, I think you’re a 100% right on that part. There are a bunch of different e-commerce companies, there are a bunch of companies that are traditional commerce companies, like Sears, right? That have become e-commerce companies and now mobile commerce companies, they have apps, but going through that registration process…

Ryan: It’s worse.

Robi: Sometimes it’s native, sometimes it’s web authorized, all that stuff. If I was on an iPhone, I’d just tap the item and then hit the little touch pad or touch ID and be away – Wow! That would be amazing!

Ian: Yeah, I mean I remember, I’ve been an Uber user for a long time but I installed Lift but I never actually used Lift because I had to put my credit card. It was like, I don’t want to go through this process but if that works, just use my thumb and I’m done? That’s a heck of a lot better experience.

Robi: Right.

Ian: The question I have then is does this start to break down some of Apple’s 30 percent ownership on digital transactions? Like if they’re only charging fractions that they’re charging on Apple Pay, can they continue to do that or will people start to get more upset than they ever have been about the 30 percent cut of app transactions?

Robi: I suspect that they don’t care long-term. I think that if they have the overall commerce market to go after, I don’t think Apple cares too much about that, and if people start getting frustrated, I’m sure that they’ll give them opportunities to use Apple Pay throughout their business. I wouldn’t be too surprised in the next year or so if Apple Pay ended up owning some of the subscription stuff that’s going through iTunes.

Ryan: We’re already seeing some breakdown of the walls of Apple with the recent thing about Disney getting Apple and Google to agree that if you buy a Disney movie, you can watch it on either device. I think we’re already starting to see some of that and it’s clear that Apple knows where its bread is buttered, and despite the fact that its media sales is a big business, it pales in comparison to its hardware. And that’s probably always going to be true.

Ian: So what’s interesting to me about that is that it’s always going to be a competitive threat to Amazon, as their business quickly moves digital, losing out on a huge percentage of revenue.

Ryan: My long, kind of moonshot theory is that Apple Pay is a big threat to Amazon because it enables so many little vendors combined with drop shipping and things like Ship and ease of purchasing things, which will create some competition for Amazon. Especially in the case where Amazon hasn’t been as focused on their ecommerce mode as they should be, with little things like the Fire, etc. at only 6 percent of retail.

Robi: Oh yeah, absolutely. And I think the interesting thing is fulfillment by Amazon has been a really smart move to create some momentum, but their mode is not the big brands, not the big ecommerce companies. In fact, most of those companies have parted ways in their relationships – so those are all opportunities for apple. Alright, so we’ve covered a lot of ground here. I think Apple Pay is very interesting, very easy to use, tremendous opportunities for ecommerce companies as well as others just to simplify the purchasing process. And we’ll see how the customer data stuff plays out, but I think security is a huge concern for consumers.

Robi: So be sure to share this, like it, and check out the other segments. Thanks.

About Alex Walz

Apptentive's resident wordsmith, Alex can frequently be found cranking away at eBooks or scrawling down ideas late into the night from a local coffee shop. He's an avid traveler, coffee connoisseur, and tech enthusiast, and he shares his thoughts on each over Twitter.
View all posts by Alex Walz >

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