All about Apple Pay

If you are considering Apple Pay you may want to understand how it works and the potential benefits for merchants. Apple Pay is a relatively new form of ‘contactless payment’ also known as part of the NFC payment system. Apple Pay is available on both versions of the iPhone 6, 7, and the Apple Watch. Contactless payment works when the customer taps or waves their mobile device near the checkout terminal that has NFC capabilities. If you have an NFC terminal, accepting Apple Pay is another flexible form of completing purchases for customers.

So, how does Apple Pay actually work?

Similar to any NFC capable device, it works by substituting a credit card account number with new numbers, thus protecting personal information. Any customer using Apple Pay has loaded his or her credit cards into the program prior to use. Apple Pay then creates a ‘tokenized number’ known as the ‘Device Account Number’ which eliminates the traditional cards permanent account number (PAN). Token numbers are stored in the Secure Element of the Apple device. When a purchase is made, a unique security code is created and paired with the tokenized Device Account Number. As the customer authorizes the payment by fingerprint the information is then sent to the NFC-compatible terminal and the transaction is complete. Using the TouchID sensor replaces the need for a PIN number by acting as the cardholder verification method.

Letting your customers know you accept Apple Pay is easy by placing these stickers on or near your NFC credit card machine.

Increased Brand Loyalty
Recent studies have shown that customers who use Apple Pay and other contactless forms of payment have stronger brand loyalty to places of business that accept contactless payments such as Apple Pay.

Now that you understand how Apple Pay works..

What are the benefits to accepting Apple Pay at your place of business?

As with other NFC devices, accepting Apple Pay is faster than using a traditional credit card. Having shorter lines due to customers no longer searching their wallets for credit and debit cards. Fraudulent purchase opportunities also decrease by removing the physical card in the instance that a customer leaves their personal items behind.
Costs
Apart from upgrading your old terminal to an NFC system, there is no associated cost of using Apple Pay. Merchants nor customers pay for use of Apple Pay, the card issuers, such as Chase, Bank of America etc. pay 0.15% of the cost on every transaction to Apple.

The flexibility of contactless payments such as Apple Pay benefit both the merchant and the customer by providing an improved shopping experience, fraud protection, shorter lines, and less personal needed during peak business hours. Understanding the various forms of payment options and NFC-equipped terminals can be an important aspect of business success.

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