Apple Pay Is Here -- But Could Its Biggest Promise Be Beacons And Loyalty?

Apple Pay is here in the UK, and perhaps the biggest irony is the news leaked via a tweet from HSBC yesterday. It stands alongside Barclays as one of the two big high street banks not currently supporting the contactless payment system. HSBC is expected to join later this month but Barclays is, apparently, dragging its heels with rumours of it being unimpressed with Apple's cut of payment revenue, which has not been publicly shared. When Apple's involved, as any app developer can attest, revenue sharing is always a thorny issue. 

But make no mistake this is a big day, although I think it holds more promise beyond mobile payments. Surely loyalty cards and beacon technology are going to end up playing a huge role here?

While contactless payment is not provided everywhere globally, in the UK it's pretty much a common place feature offered by newsagents, convenience stores, supermarkets, fast-food chains and coffee shops -- the type of retail outlet where people are on the move and not spending more than the usual GBP20 limit. In fact, anyone using the London Underground may well have been surprised to recently find contactless payment has been added, allowing travelers to wave a credit card over the yellow Oyster reader to instantly enter the network. Little wonder then that UK contactless payments hit the 319m mark in 2014, a rise of more than 200%.

So, in the UK, Apple Pay has less to demonstrate with mobile payments than it does elsewhere. What's going to be interesting, first of all, is not only how many times it's used to buy a flat white and muffin because I'd suggest it's already a given that iPhone 6 users will just show the phone they already have in their hand rather than look for a card or cash. Whether it takes off online for payments by just requiring a password, instead of asking for expiry dates and security codes, will be interesting to see too.

However, the real impact for digital marketers is going to be when Apple Pay gets intertwined with loyalty apps via Passbook. People may think that getting rid of the credit card for contactless payment is the big step forwards, and they have a point, but I reckon it's getting rid of those pesky loyalty cards we're given but never use is where the technology will really hit home. Everybody has that moment of being asked at a cash register if they have their loyalty card with them and, chances are, if it's not our favourite supermarket then it's a card we've spring cleaned from our wallet at some stage. 

So, imagine if we didn't need all those cards. Imagine if brands fully embrace the Apple Pay ecosystem and have loyalty cards installed in the same device. That means we could not only earn a few points that will one day add up to a free coffee, without dragging a card around with us, it also means the retailer can take payment and get a better idea of who we are and what our shopping habits are. Yes, this could be done with your average loyalty card, but ask yourself this, how many times do you find yourself in a shop with your mobile phone compared to how many times you've remembered to go through the "useful" drawer every house has to be find a dozen loyalty cards and put them in your wallet?

Throw in a bit of Apple Beacon technology and you have the start of something all digital marketers should be really excited by. The retailer, or perhaps a brand it stocks which a customer has installed a loyalty app for, would know some key details about clients coming in to a store. They could know previous shopping habits and could match these to current promotions and likely needs. These could be flagged up so the customer is aware of the offer as well as accessories they may well be looking out for to support a recent purchase. A minor example could be my eternal hunt for laces the correct length for a pair of walking boots I bought a year or two ago as well as studs, or "cleats," for my winter and summer football boots. Had the retailer I always go to noted the past purchases they could alert me, or allow me to scroll through past purchases, and then click to get the correct accessory. I'd then be sorted and no doubt on my way to buy another bunch of other stuff at the cash register. 

So, make no mistake, Apple Pay is big news for contactless payment, as will Google' system when it launches later in the year. But, where digital marketers should be looking is understanding customers better and reaching out to them more effectively through combining payment and loyalty on a single device which can free us all from carrying round a dozen store cards just in case we find ourselves popping in.

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