As a small business owner, you want to offer customers easy and secure payment options that are straightforward to use and track. Apple Pay is a mobile payment method many customers like and even prefer. It also offers numerous benefits for businesses. We’ll explain how businesses can start accepting Apple Pay and share the upsides and drawbacks of this mobile payment system.
Editor’s note: Looking for the right credit card processor for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.
Getting started with Apple Pay is quick and easy. Follow these steps to install a payment reader and set up Apple Pay:
Apple Pay uses near-field communication (NFC) technology. To start accepting Apple Pay and other NFC mobile payments, you need an NFC-enabled payment terminal. Check with your payment processor to see if your current hardware supports this payment method. If it doesn’t, work with the processor to purchase and install a payment terminal that takes contactless payments.
Once you’ve purchased and set up your NFC-enabled payment terminal, test it to ensure it works. Then, place it where your customers can easily see and access it during checkout.
When your terminal is set up, train your staff to accept Apple Pay digital payments. Ensure they understand the customer’s point of view as well as the salesperson’s. Even though most payment-acceptance interfaces are user-friendly and intuitive, ensure everyone understands the system and gets practice time using it.
Now that everything is set up on your end, direct customers to the terminal when they want to use Apple Pay at checkout. Once the card reader and their device connect, four green lights should appear along with a chime sound, signaling that the payment is accepted and the transaction is complete.
Speed and security are the two primary Apple Pay benefits.
Mobile payment methods like Apple Pay save time when compared to magnetic-stripe or chip cards or handling cash. You can process checkouts faster, which is especially useful if your business sees a surge of people at specific times. When customers check out faster, they won’t feel impatient and go elsewhere.
When using Apple Pay, customers benefit from an extra built-in security layer just by using their phones. The Apple Pay app requires fingerprint or passcode authentication. Even if someone steals a customer’s phone, they won’t be able to use that person’s Apple Pay, lowering the risk of payment fraud at the point of sale. Compare this to a situation where a customer’s wallet is stolen: The thief may make several purchases before the credit card is reported stolen.
Additionally, Apple Pay uses an encrypted security technology called tokenization. Tokenization means Apple Pay and other mobile wallets are nearly impossible to hack. In contrast, cash and magnetic stripe cards can be counterfeited, putting business owners and consumers at risk for fraud. Apple Pay’s unique payment method significantly lowers that risk.
Apple Pay is Apple’s contactless mobile payment system. Users access it through an iPhone, iPad or Apple Watch and use it to check out at a store or restaurant. The Apple Pay app stores their credit card or banking information; when they check out, they tap their phone to a compatible card reader instead of fumbling with their wallet. They can also send and receive payments from other users, make in-app purchases, and pay for rides on select public transit systems.
This point-of-sale method offers advantages beyond convenience. The pandemic made contactless payments a health and safety priority, and many people still prefer to pay this way. Apple Pay and other mobile payment services facilitate contactless payments.
Apple Pay uses NFC technology to transmit payments. NFC allows two devices – in this case, the customer’s device with the Apple Pay app and the business’s card reader or terminal – to communicate wirelessly when in close proximity. Most contactless and mobile payment systems use a form of NFC.
As mentioned earlier, Apple Pay uses tokenization to prevent fraud and identity theft. Tokenization replaces a consumer’s credit card account number with a series of randomly generated numbers known as the token. The token travels over the internet or payment network and processes the payment without actual bank account details being exposed.
This process begins when a customer first sets up the Apple Pay app. They take a picture of their credit card, which Apple uses to contact the user’s bank or creditor. They replace the card details with a token, which is sent back to Apple and stored in the customer’s phone. Then, when the shopper makes a purchase, the app uses the token, not their actual banking information, to process the payment, which prevents hackers from extracting their credit card details.
For all the ease of Apple Pay, you should know about potential drawbacks and limitations before proceeding:
Aside from the cost of the processing terminal (if you’re required to upgrade the one you have or must purchase one for the first time), Apple Pay is free for consumers and businesses to use.
There is no additional cost for companies to accept Apple Pay. Instead, Apple charges credit card issuers 15 basis points, or 0.15 percent of an Apple Pay purchase, to guarantee that the tokenization is secure.
If your point-of-sale terminal already accepts contactless credit cards or Google Pay, you’re likely capable of accepting Apple Pay. But if you’re not yet accepting contactless payments, contact your payment processor and ask it to help you set up your point-of-sale terminal to enable Apple Pay. This may require a new card reader or could involve a simple software or firmware update.
Two primary Apple Pay competitors are Samsung Pay and Google Pay, alternative mobile payment solutions created by Samsung and Google. These methods are intended for Android devices or Samsung devices, in the case of Samsung Pay. Modern payment terminals that are configured to accept contactless payments should already be set up to accept Samsung Pay and Google Pay.
Other potential options include PayPal or Venmo. These payment applications allow shoppers to pay for contactless purchases in brick-and-mortar locations through their respective apps. However, Venmo and PayPal require an additional checkout system that scans QR codes.
According to Statista, 507 million people worldwide use Apple Pay, and that number is only expected to grow. Apple Pay is a modern, secure and efficient way to accept payments. While Apple Pay has some minor downsides, none are unique – they apply to mobile payment technologies in general.
Your business has much to gain by accepting Apple Pay because it allows quick and frictionless payments. Customers spend more when the purchasing process is quick and convenient. Additionally, accepting Apple Pay shows customers that your business is modern and connected to the latest technology.
Sally Herigstad contributed to this article.