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Success With Apple Pay?

Apple has been well known as providing technology solutions that have changed industries over night.  iTunes and Apple TV helped change the retailing of music and movies for ever.  Legendary retailers no longer exist because of their disruptive technology.  Although there is trouble on the horizon on how consumers listen to music – they more and more stream it versus buy it from iTunes (as evidenced by absolute declines in purchased last year) – Apple is responding with their own streaming services.

On the topic of disruptive technology, Apple recently introduced Apple Pay.

Many people have been skeptical on the acceptance of the mobile wallet.  Do you remember when people questioned whether anyone would use an ATM?  I remember the bank employees taking customers out of lineups and bringing them over to machines to show them how easy it was to do.

Will the cool user interface (that has made Apple famous) be the right ingredient for customers to adopt Apple Pay?  Or more importantly, will retailers be the one’s that influence or slow down its adoption?

There are a lot of competitors to Apple Pay (Softcard, Google Wallet, PayPay, etc.).  Which one will dominate?  Which one will retailers embrace.  It is too early to tell – but one thing is for certain – the experience of waving your phone over a terminal and leaving is attractive to speed of service and convenience.

Recent customer experiences are not describing the wave and leave experience.  The terminal is asking questions that require 3 or 4 interactions which defeats the convenience experience.  One retailer’s POS system prompted the user if they wanted to donate money and asked to confirm the purchase amount.  Another retailer’s front-line cashier didn’t even acknowledge that their terminal accepted Apple Pay even though it said it did – and worked flawlessly when the phone was waved in front of it.

How many times has it been said that the front-line makes the difference. Have they been trained, are they engaged to help make the customer transaction faster, are they more or less stressed about handing out the correct change – and many more opportunities and concerns – which leads to the basic truth – the retailer and their staff will undoubtedly make the difference in these new commerce solutions.

For years, payments industry insiders have been skeptical of the rise of the mobile wallet, a vision of the future where customers eschew wallets for credit cards stored on their smartphones.

And then came Apple Pay.

The new product, which lets customers pay for items in retail stores with a wave of their iPhone, has seen more adoption from banks, retailers and credit card companies than previous offerings from Google or cellular carriers like Verizon and AT&T. And while it’s too early to say the product is a mainstream hit, early data suggest that some early adopters are eager to try the new form of payment.

But while Apple has done a lot to help usher in the new form of payment, experts say Apple Pay’s success lies in the hands of the people behind the counter.

“I do expect that over time Apple’s mobile wallet will have greater success than Square Wallet, Google Wallet, or V.me,” said Denée Carrington, a payments analyst for Forrester Research, in a blog post. “But an elegant user experience won’t be enough to do it.”

“Merchants will determine whether Apple’s mobile wallet lives or dies,” she said.

Naturally, two months after the introduction of Apple Pay, I decided to see how well merchants were in handling the new product. Below is my recent daylong experience of trying to buy various things at a random sampling of retailers in Manhattan that accept Apple Pay.

Toys “R” Us — Midtown, 11:55 am.
Battery: 68 percent

The Toys “R” Us in Times Square is one of the largest toy stores in the world — 110,000 square feet, and almost always crowded. In theory, a product like Apple Pay, which is meant to speed up the check-out process, would be perfect for such an environment.

I grabbed a miniature stuffed giraffe and headed to the long check-out line. My cashier was a nice woman who immediately knew what I meant when I asked if the store took Apple Pay.

Not only did she know about Apple Pay, she knew other mobile wallets like Softcard, Google Wallet and PayPal; Toys “R” Us accepts them all. Lately, she said, many more people were using their phones to pay for things. She couldn’t tell me how many more people, just that the number was increasing.

While the store obviously trained her well, my experience was not seamless. The payment terminal timed out the first time I tried waving my phone over it. It worked on the second try, but I still had to tap through three or four prompts on the terminal screen. Did I want to donate money to a cause? Is this purchase amount correct? But in all, the cashier made it a pretty nice experience.