Sunday, November 23, 2014

How is Apple Pay Doing ?


Apple Pay on iPhone
Early last month I wrote at article titled Why will Apple Pay make Mobile Payments a Reality ? , predicting that Apple Pay would have a huge impact on the mobile payments market.  So.....  ?

  • How's Apple Pay Doing ?
  • Does MCX's CurrentC have a chance to compete ?
  • What would be a Great UX Design for Loyalty and Promotion programs ?
  • How could we integrate Apple Watch in to the customer experience ?
  • Why will Apple Pay win ?


How's Apple Pay Doing ?

I like what John Gruber of Daring Fireball had to say on Oct 28.  It sums up quite nicely, what's been happening the last month.
"One week, and Apple is already the market leader — using the same systems that Google Wallet and whatever else is out there have been using for years. And in retail locations (as opposed to within apps) it only works with one-month-old iPhone 6 devices."

Let's examine that for a minute:
  • It's was only 1 week after Apple Pay launched in iOS 8.1 released Oct 20.
  • Google Wallet and others have been trying for years, and barely made a dent.
  • Apple Pay is only supported on the iPhone 6 and 6 Plus.

And yet….  Apple Pay still has already made a ginormous impact.  And it's only just gotten started.

Need more ?  Check these out: 


The MCX CurrentC Controversy

Right after the launch of Apple Pay on Oct 20, it started getting used everywhere it could.  Even places that did not officially support it, but they had the hardware at cash registers to allow it to work, and other payment solutions that used NFC, like Google Wallet.  So it only took a few days for stories to totally blow up when Rite Aid and CVS completely disabled the NFC readers in their retail stores.

And it only took a week after the launch of Apple Pay for the reason to surface.  CVS and Rite Aid and other big retailers were participating in a consortium called Merchant Customer Exchange (MCX).  Other retailers like Walmart, Best Buy, Gap, Lowe's and more.  And they are funding MCX's product development and their agreement with them included exclusivity clauses.  They cannot accept any other mobile payment options and if they do they will forfeit the money they've invested in MCX.  And MCX's tech called CurrentC is not even ready yet.  They hope to launch sometime next year.


Bad Tech, Bad Strategy

The hugely successful release of Apple Pay has shown a bright light on MCX and their CurrentC technology, and it's not working out well for them.  MCX's bad strategy and even worse technology has come under enormous scrutiny.  Especially when it's compared to Apple Pay, it looks pretty pathetic.

First of all MCX's strategy is motivated solely by merchants.  Not customers.  Don't let they're name fool you.  In spite of "Customer" being in their name, most of what they are doing is not in the best interests of customers.

You see, merchants wanted to stop paying the payment card processing fees to the likes of AMEX, VISA and MasterCard.  And they wanted to track you, their customers, a whole lot closer.  So they created MCX with the mandate to do both.

While part of what MCX's CurrentC will offer is easier access to loyalty programs, that could offer special deals and lower prices, it comes at the cost of privacy.  MCX could track everything you do across every retailer that participates in MCX.  And the spine chills at what they could do to customer privacy, if they share all that data.

MCX has no innovation to offer with loyalty and promotional programs, because, like their use of QR code scanning instead of NFC, their thinking is stuck in the mud of the last century.  QR codes ?  Really ?  QR codes were invented in 1994 dudes.

Besides the scary privacy implications of CurrentC, what MCX is designing looks like it will also present some security concerns as well.  They've already had a security breach and they haven't even released a product yet.  Not to mention that it is just an awful, terrible, shockingly horrendous customer experience.  Check out this TechCrunch article that dives in to how CurrentC works and what MCX is up to.

MCX and their CurrentC tech cannot be successful because it's not what customers want.  Besides the scary privacy and security issues, it's just a ridiculously complicated customer experience.  The potential benefits that the loyalty program aspects of CurrentC offers, will not be a good enough reason for customers to go through the effort of dealing with the terrible customer experience and to give up their privacy and put their security at risk.

Retailers entangled with MCX should jump ship now before it becomes even more embarrassing for them.  Midwest retailer Meijer with 213 stores and member of MCX, is already forging ahead by accepting Apple Pay.  Blocking Apple Pay, Google Wallet and others is making Walmart and other MCX members look pretty bad already.

Jim Dalrymple at The Loop has some great advice for Walmart that the other MCX members should follow too.  And if the bad tech and bad strategy isn't enough to dissuade you, do what's best for customers.  Exclusive payment service deals is the direct opposite of what is best for customers.

Blocking other payment options like Apple Pay may also get retailers in bigger trouble than just the PR disaster it is becoming.  A class action lawsuit is already being investigated.

For a marketing professional's perspective on MCX and CurrentC, take a look at Ron Shevlin's article.  In it he quotes Lee Scott, the former CEO of Walmart:
"I asked Mr. Scott why, in the face of so many failed consortia before it, would MCX succeed ? He said:"

"I don’t know that it will, and I don’t care. As long as Visa suffers.”
That might say a lot about MCX and it's member's motivations.

Be smart retailers and payment services.  Let customers decide.  Give customers choice.  And keep their data safe and private.


Great UX Design for Loyalty and Promotion

Existing loyalty and promotion programs that merchants are using can benefit tremendously from mobile technologies.  But they need to stop using old school thinking.  I haven't seen anyone truly innovating in this area yet.

There are rumors that Apple is working on a loyalty program and cross promotion integrated with Apple Pay, maybe as early as this year.  An innovation that requires the thinking outside the box and great design that Apple is famous for, is mentioned in the article.  It involves integrating iAds and iBeacon with Apple Pay to further monetize the tech and target promotions based on location.

The potential customer experience is elegant, useful and powerful.  A customer walking through a store gets a push notification of a product on sale.  The customer could even be directed in real time to the exact location in the store to pick up the product, without having to hunt around for it.

Through a store wide deployment of iBeacon transmitters and integration of indoor maps in the store's app, in store navigation directions are possible.  As well as product cross promotion based on exactly where in the store the customer is at the moment.

For example, a customer could be browsing in the soda aisle of the grocery store and a notification pops up about a deal that combines the purchase of a specific soda brand with a snack food brand, to stock up for the big game this weekend.  Another example is a location aware implementation of a sale flyer that can show what's on sale near you.  And help you find the sale items in the store.


Extending the Customer Experience to Apple Watch

Apple Pay on Apple Watch
Now imagine that customer experience extended to Apple Watch.
  1. The notification causes Apple Watch to tap the customer's wrist.  Using the Taptic Engine built in to Apple Watch, it can produce haptic feedback in the form of a gentle tap on your wrist.
  2. They raise their wrist up to look at Apple Watch and the display automatically turns on and there is the notification of the special deal already on the display.
  3. The notification offers to guide the customer to the aisle and shelf where the soda is located and they tap that option on Apple Watch.
  4. Apple Watch launches the store's Apple Watch app which integrates with the store's iPhone app.
  5. Apple Watch displays indoor navigation to guide the customer to the exact aisle and shelf.  And when their wrist is not raised, indicating the customer is not looking at the Watch display, it taps their wrist as each turn approaches indicating which way to turn.
  6. To pay at the register the customer simply waves their Apple Watch over a payment reader.

The imagination explodes with ideas inspired by Apple Watch.  This is just 1 of millions of possibilities.


Apple Pay Wins

The enormous strength of the Apple brand, the incredibly simple customer experience, the insanely great security and complete respect for customer's privacy, will ensure the success of Apple Pay.  And those who do not heed their example, will fail.

Apply Pay also means good things for those on Android devices too and those using lesser payment technologies.  The example Apple Pay sets for security and privacy will improve the solutions offered by Google Wallet, PayPal and others.

Once again, Apple innovation excels beyond everyone else…  the others follow…  and the world benefits.

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