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A couple generations ago, if you didn’t carry cash on your person, perhaps a personal check was accepted at your favorite store. Then credit cards became an option, followed quickly by debit cards. And now, with technology changing seemingly overnight, two new payment options are becoming available to consumers at select and very notable retailers.
Apple Pay and CurrentC are two smartphone payment systems. CurrentC is a new (yet unreleased) smartphone payment system from a group of retailers, including the likes of CVS, Best Buy, WalMart, Sears, and Target. When it is up and running, with a CurrentC transaction, the customer’s payment will be debited from a connected bank account. Whereas Apple Pay’s system is partnered with banks and major credit card providers. The new Apple Pay system works only on the iPhone 6 and iPhone 6 Plus and integrates security technology that requires a fingerprint to conduct a payment transaction.
Apple Pay was launched on October 20, and has been greeted with lots of hype and controversy. In just three days one million new credit cards were added to Apple's integrated Passbook app. Despite the fact it is only compatible with the iPhone 6 and iPhone 6 Plus, there is clearly phenomenal interest. This is great news for the retailers that have jumped on board and have started accepting this payment method. But perhaps not such good news for other retailers – consumers may soon stop shopping at places where their new preferred payment method is not accepted.
Retailers are taking notice of the interest in Apple Pay and some are turning their backs on this payment system. This is perhaps not a wise decision as essentially it means turning down customers and prospective new customers. It may be wise for these retailers to observe how quickly Apple Pay has caught on. It is likely to continue to expand as more consumers upgrade their phones. If the demand warrants it, aren’t more businesses likely to give the customer what they want? That’s the way it usually works. Why not keep your customers happy right from the beginning?
Loyalty doesn’t happen overnight. But losing customers because their wants or needs aren’t being fulfilled can occur instantly.
Every day we are hit with advertising and marketing messages. As consumers, we gravitate to a select number of places that offer the products we want or need to purchase. If we usually visit Wal-Mart and CVS, but they don’t accept our preferred method of payment, we may drive down the road to another store that will take our money. Will we return to Wal-Mart and CVS? That’s the question with unknown answers. Will retailers jeopardize consumer’s immediate business and the long-term loyalty ramifications if they do not accept the payment the customer prefers?
If two like companies are offering the same product with comparable prices, but one accepts the consumer’s preferred payment method, it’s only logical that it won’t be long before a the customer starts shopping at the place that allows the customer to pay their way.
As Apple Pay (or other virtual payment options) become more popular, businesses will lose the ability to track transactional data. The one thing to keep in mind, however, is that Apple’s Passbook app (which is built into iOS 8) also allows consumers to carry all of their loyalty cards within their virtual wallets. Loyalty programs of the future may end up being the only way for businesses to leverage transactional data to improve and target their marketing efforts.
The question has now transformed from “What’s In Your Wallet?” to “What’s Not in Their Wallet?”… And you better hope that the answer isn’t your business.