Commentary

Apple Pay Should Pair With iBeacon

Over the last few years, Apple has invested in the retail industry, primarily through the launch of Apple Pay and iBeacon.

In October 2014, Apple launched Apple Pay but has yet to see massive adoption. A year earlier, it was iBeacon, which is growing rapidly and our research shows that more than 8 million beacons are deployed globally. The forecast in 2021 is a massive 500 million beacons.

What is Apple´s big play here? Are those two revolutionizing technologies really meant to live in solos or has Apple planned how they’ll work together to accelerate the growth and adoption of both? I believe the latter and here is why: 

  • Apple Pay and iBeacon are the perfect tag team. iBeacon can be used as a trigger to get people into the store and enrich the shopping experience and Apple Pay as the final close of the visit through an easy and convenient check out technology. The missed opportunity is to tie the two technologies together and create a holistic customer experience. If Apple and retailers want a higher adoption of Apple Pay, they should include iBeacon technology. In store, I want my payment apps to send me beacon triggered notifications with relevant offers. I’m now in a true mobile experience and don't want to pull out my payment card. Apple Pay and iBeacon has to be a de facto tag team.
  • Apple Pay has a data challenge iBeacon will solve. Apple is not in the business of collecting or monetizing data, but the real reason Apple doesn't do more with Apple Pay data is that it can´t. The limitation lies in the technology as Apple Pay and NFC- based systems lack access to the product level. It’s privacy friendly, but is an issue for the development of Apple Pay. Without data from transactions and store visits, Apple Pay loses its potential value to retailers and consumers. Retailers rely on customers and purchase data and customers expect retailers to know them and provide better experiences. This is where iBeacon can complement Apple Pay. iBeacon can be enabled to collect data about customer interactions with beacons. The data collection is always opt-in and tied to the advertising identifier (IDFA), a privacy friendly identifier Apple introduced when iBeacon launched. Through beacon deployments, retailers and brands can collect data to understand what people do in-store. iBeacon complements Apple Pay, allowing retailers to build and improve their business. In return, customers get a contextual experience enhancing the physical world they live in. 
  • One more thing. Earlier this year a new Apple device passed through the FCC and the device comes with both Bluetooth and NFC. We've earlier speculated if this is a new ‘iBeacon 2.0,’ a new point of sales system or both. Apple’s secret are more safely guarded than Fort Knox. We’ll just have to wait for the next Developer Conference or Keynote.

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There should be no doubt that iBeacon and Apple Pay will play an important role in accelerating each other's growth. 

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