Why retailers will absolutely love the Apple Pay era

“Retailers should be particularly excited for Monday’s debut of Apple Pay, which promises to be an excellent tool for separating shoppers and their money,” Kyle Stock reports for Bloomberg.

“Apple’s mobile payment service will let iPhone users buy things by simply pulling out their device. Researchers have long found that shoppers spend more the further they get from handling actual currency and tend to better remember cash transactions. These tendencies help explain why credit card balances tend to bloat and why casinos use chips in place of money. It’s also why companies such as Starbucks encourage customers to load money onto apps or prepaid cards,” Stock reports. “Behavioral economists have a term for this dynamic: decoupling. The card or app or casino chip mentally separates the consumer from his bank account. The payment is both delayed and bundled with other charges so it doesn’t seem so painful. Citibank tested the research in 2009 and found a mobile “tap to pay” pilot program significantly boosted both the number and size of consumer transactions.”

“Apple Pay doesn’t require any swiping or tapping, which seems to suggest a new level of abstraction,” Stock reports. “With a fingerprint on the iPhone button and a little wave at the cash register, the deal is done.”

Read more in the full article here.

Related articles:
With Apple Pay, iPhone 6/Plus users lead U.S. mobile payments revolution starting Monday – October 16, 2014
Apple Pay set to transform mobile payments starting October 20th – October 16, 2014


    1. pretty good idea for an app,”YouSpent” that totals and updates every expenditure for any designated time period, especially if 100% of your expenditures are done through your iDevice. Then those expenditures could be boxed into categories like “must have” like groceries, utilities, mortgage and “you can live without this” like impulse buying, dining out, etc…could be a great help in budgeting your income.

      1. in real time, I meant. The app would probably have to work within or in collaboration with your banking app and Pay. For instance, you set your time period from payday to payday, “iSpent” records that deposit and all subsequent expenditures, you see what you have left and what you’ve spent before you make a purchase with an advisory that tells you “must have” or “you can live without” or something in that vein.

      2. further, the app could immediately peruse the item you’re intending to purchase at surrounding retail outlets to automatically find you the best price, assuming that barcoded inventories and their price data are accessible through the web. An example, you intend to purchase a clock at your local Walmart, you scan the barcode to set up the purchase, but before you pull the trigger, “YouSpent” looks for nearby online inventories to compare prices..you might get the advisory “You can live without this” with “This item is $2.79 less at K-Mart, 1.5 miles from your present location.”

        1. I must be naive because when I heard about Apple Pay I preume much of this would automatically be part of the service, after all this would be the overwhelming advantage of using a payment service tied to your smartphone over other payment methods. Instant access to usage and outlay would sell it to me in a way that purely using the phone instead of a card would perhaps not otherwise be strong enough. Is there really no immediate ability to do this?

      3. one last idea, iBeacon, instead of inundating you with ads while you’re shopping, it would be great if it also let you find items within a store. You go into your grocery store, and you’re looking for Nestle’s Quik. So instead of walking up and down aisles and mumbling “does ANYONE work at this shithole?” to help you find it, iBeacon would find the barcoded item for you and lead you to its exact location.

        1. I’ve asking for this for a long time. OK, whining. Is it too much to ask these big box stores (Costo etc) for instance to install terminals so a shopper can find items for herself, much like the ones Border’s Books had (before Amazon shot them like a horse). When I shop for clothing, I always dress smartly and the salespeople rush over to me, sensing a killer sale in the offing, but that trick doesn’t work in those warehouse-type places. One might as well wear sackcloth. And some like Home Depot don’t even check you out—you must scan the items yourself and feed money to a machine. I appreciate that they are trying to keep costs down, and may even pass along some savings to customers, but they would save even more by implementing helpful technology such as you suggest, and customers would save time in the bargain.

        2. my big hope for Apple in the future is its entrance into banking… its commitment to privacy, its trusted name brand, the established equity in retail outlets, superb customer service, its current 200 million iTunes credit card accounts, its incredible success in accumulating real capital, its recent forays into Pay and iBeacon make it the perfect candidate for a Jobsian “one more thing…bank.”

        3. Good idea, and one I’m sure is on its way. While the first use of iBeacon is advertising, there are many potential uses for this technology. It will be fun to see who entrepreneurs adopt iBeacon in a number of wonderful ways.

          I myself am waiting for iBacon, which automatically downloads strips of delicious bacon or Italian pancetta whenever I think about it. Like right now, for example.

          Bacon. It’s not just for breakfast anymore.

          1. my thinking is to make the sale and you can’t make the sale if the customer cannot conveniently find the item for purchase..the advertising within iBeacon would be best served “after the query to Siri.” For instance, I ask Siri in my local Walmart where Nestle’s Quik is, iBeacon locates it for me but in the interim before the actual purchase, competitors might advertise an alternative, such as Bosco at a better price. As it sits now, iBeacon has no value to the customer, it’s as welcome as junk mail.

            1. Think about it for a minute, iBeacon coupled with Pay is the Madison Avenue multiple orgasm..you have the customer in the store, the mindset is for purchase now. The revenue source from an Apple service of this magnitude is unbelievable, an ad on the Superbowl can’t hold a candle to the power to sell directly to a customer who is about to put the product in the basket. Everybody wins: the consumer: ease of purchase at the best price; the retailer: reduced labor costs, the ultimate “spreadsheet”; and the manufacturer: who is my competition and how do I outsell them immediately.

              The value of advertising placement on IBeacon/Pay would be phenomenal.

        4. Total Wine and More kinda does this.
          Not in an app though.. Look up a specific beer/wine on your phone, and the store you are shopping at (or heading to) and it will tell you the isle its on and left/right side of said isle.

          Grocery stores I kinda know where things are, or “should” be..
          Home Depot also, but thats cause i go there a lot and if you are looking for a specific item, you tend to know the general area also.

          (Was reading hannahjs post and saw the Home Depot part)

          And for some reason I thought there was some savings app that you can scan in items and it will tell you where it’s cheaper, locally.
          I know Amazon has their scan app that you can scan something in a store and they will find it on Amazon for you.

        5. Again I presumed that Apple Pay and iBeacon would be linked do that they could work in synchronisation where the advantages of each will benefit the other. I’m sure this will happen in the future but just a little surprise there is presently no hint of it. Maybe App,e thought that tying advertising to buying would have some negative vibes and want to get Apple Pay up and running first.

  1. I don’t believe, at least at first, it will go as smoothly as that. More on the other side of the cash register, as the retail drones try to figure out how to setup the register to accept the correct form of payment. For instance, when you swipe your card now, it is either credit or debit, red button or green button, or cancel and they are not always the same. Whoops, pressed wrong button, gotta start again. You see where I’m going with this. Not to mention, idiots that do not know how to use their phones properly or touch ID not working correctly due to sweaty hands, etc.

      1. I’m not saying it won’t work fine, if you read my post, the people that will be the problem. initially. I suspect eventually everybody will get it. The article implies it will be smooth as silk from the get go. OK, evil woman?

        1. I am willing to bet that the people that have an iPhone 6/6 Plus and will be using  Pay, won’t have many issues.

          Give an iPhone 6 to some random person on the street and have them use  Pay…
          Or someone that has always written checks, used cash etc. getting *them* to use  Pay..

          I’m sure there will be hiccups/issues in the next few weeks though.

    1. Of course, the “credit or debit” question is on them. They don’t have to ask. I fucking hate that – they always ask, “credit or debit?” like “do you want the meal?” when I order a goddamned Big Mac. If I wanted the fucking meal I would have ordered #3 or whatever the fuck it is. My card says MasterCard so it’s fucking credit and stop asking!



  2. Those very occasional difficulties don’t provide any barrier to people using their credit or debit cards. They’re not going provide any road bump for Apple Pay.

  3. I think Apple Pay will be a huge hit online very quickly. Once that happens, physical retailers will see Apple customers have got used to paying that way, and will come around.

  4. Retailers ask “Debt or Credit” to lead to the question “Do you want cash back” that is asked to get the purchaser to up the debt card transaction amount so the bank fee will be less.
    Will Apple Pay work with debt cards?

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