Apple Pay- Don’t Leave Home Without It, and a Credit Card?

Apple is tying a new (but old) payment method to a new phone and a new OS. While obviously mass market in intent, the rollout means it’s likely to be used initially by tech-savvy early adopters. These are the same people who have been saving their credit cards with e- and m- commerce merchants for years now (isn’t the magic of Uber the fact you don’t pay?). A quick analysis of my credit card bill shows more than half the charges are stored card-on-file transactions. If my supermarket had its own Starbucks-like app, that would take out another 10-15% of my transactions.

The protests about Apple Pay being turned off in drugstores are instructive- there are increasingly fewer places where people actually whip out a card to pay. Opentable’s experiments with eaters paying for meals booked through the system via the Opentable app and a stored card will take another chunk of the “payment opportunities” off the table.

If Apple Pay data is readily available, will one effect be for high frequency retailers to develop their own apps, as Starbucks has done? While it’s hard to imagine an app for every store, it’s not as hard to see a consumer using a combined shopping, loyalty, and payment app for their top-5 most frequent stores (on in Opentable’s case, top scenario). Apple Pay might be the infrastructure behind that, but Braintree/Balanced/Stripe are surely more likely to be the multi-platform plays.

One relatively common activity which does tend to drive purchases at unusual/less frequent places is travel. That’s also a situation where the payment problems can be harder to deal with- you simply don’t know what you’ll get and you can’t just run home. People won’t be heading to the airport relying on their phone as a wallet, in the way Starbucks has meant you can leave your wallet at home when you are running out for coffee.

Cloud commerce, often triggered by a local device, is here to stay; whether it needs to mimic a payment mechanic developed in the 1970s is less clear to me.