Apple Pay has been taking the UK by storm and grabbing headlines. Unsurprisingly, we get lots of questions about what it means, its impact, and how to use it. To answer some of the most common questions, we've put together a handy Apple Pay FAQ. We plan to grow this list over time, so let us know if you've got a burning question we haven't answered below.
Q1 | What is Apple Pay?
Apple Pay is a mobile payment service that lets Apple device owners - namely those of us with iPhones, iPads and the Apple Watch - pay for things more easily and securely, in person or inside iOS apps.
In an app with Apple Pay enabled, iPad and iPhone users who choose to checkout with Apple Pay have their payment and personal details completed for them - or ‘autofilled’. The user just has to confirm the transaction by touching the fingerprint scanner.
In person, an iPhone or Apple Watch acts just like a contactless card, but with an added layer of security. A fingerprint scan is required to complete payment in the case of the iPhone, and with the Watch, a pin is entered when the user first puts on the device. The owner can then use their cards by double-clicking on the side button of the device (the Watch automatically locks again when removed from the wrist).
Q2 | What’s the benefit for customers?
Apple Pay makes the process of in-app payment much more convenient and trustworthy - the two key axes we measure payment services on. Compared to most mobile checkouts, Apple Pay removes frustrating form-filling and data entry, as well as the need to find your card when paying for something.
For in-person payments, the improvement is less obvious for iPhone users, who still have to get something out of their bag or pocket to make a payment. However, for Apple Watch wearers, Apple Pay is now just a couple of clicks away.
In both cases, Apple has added security features that beat traditional methods. Apple stores a unique Device Account Number in place of the actual card number, on a secure chip on the device so details remain anonymous - even to Apple. The device also generates a new ‘dynamic security code’ every time a user makes a payment.
Additionally, if you were to lose your device, you can remotely wipe your cards from it using Apple’s Find My iPhone feature.
Q3 | What is the benefit for retailers?
Giving customers a quicker and easier way to checkout from an app leads to higher conversion rates. Every extraneous form-entry box and confirmation page you force your customers through will ultimately lead to drop-off.
Customers increasingly expect to be able to shortcut checkouts, whether with auto-fill options or Wallet and Card-on-File options. However, they don’t want the hassle of creating an account (and giving a business their card details) with every service they consider using. Offering Apple Pay lets the customer bypass that process, and skip straight to payment.
A number of apps have claimed significant increase in conversion since implementing Apple Pay. For example, Staples saw conversion increase 109%, with others such as SeatGeek and IndieGogo also quoted as seeing conversion rates double.
Q4 | Who is able to use Apple Pay?
iPhones account for around a third of UK smartphone owners, who are also commonly the smartphone users most likely to buy physical goods through apps. Four out of five iPhones on sale now include the NFC chip and Secure Element required, and this means it is likely that during 2016, the majority of iPhone owners will be able to use the technology.
Apple Pay requires a participating bank, and this currently includes many of the main UK retail banks - with some notable absences including Barclays, who have said they are working to bring Apple Pay to their customers.
A range of apps are currently accepting Apple Pay in the UK, from Airbnb to Zara. The list of apps and stores has been steadily growing since launch.
Q5 | How do I implement Apple Pay into my app?
Theoretically, using one of the supported payment providers like Braintree or Stripe, all you need is one line of code to implement Apple Pay. It should be noted, however, that some of these providers do add in an extra cost.
Next, you need to make sure that it integrates with the payment gateway. Check the supported list here. Provided your payment gateway and acquirer bank support it, there shouldn’t be any other significant changes.
Merchants need to make sure their developer creates a merchant certificate on Apple’s website (which is unique for each seller). For in-app integration, you need to make sure the device supports Apple Pay first. Provided they do, the following steps can be taken:
Present the Apple Pay sheet which, after verifying the Touch ID of the user, will return encrypted information containing the seller's unique certificate and the payment information - this is sent to Apple’s servers;
Apple takes care of the payment and sends it back, re-wrapped (for extra security);
That package is then used by the merchant’s servers to decrypt the payment using one of the recommended payment platforms.
Q6 | What will Apple Pay cost me to implement in my app?
The cost of implementation within an app is limited to the cost of any development work, plus any integration work with your payment provider.
Q7 | What will Apple Pay cost me to offer to customers?
As a merchant, it doesn’t cost you anything to offer the service. The payment costs exactly the same as an equivalent card transaction. Apple’s arrangement with banks is undisclosed, but it is claimed banks pay a small slice of each Apple Pay transaction to Apple for the added security provided by the service.
Q8 | What data will I get?
As a merchant using Apple Pay in an app, you can request specific data in addition to payment credentials - such as billing address, shipping address, delivery method or pickup, and contact info. However, Apple encourages developers to request the minimum data to keep input requirements down.
Q9 | How / should we communicate that we offer Apple Pay?
The most important thing is to clearly highlight the option to use Apple Pay in the checkout flow of your app. Apple has great Identity and Human Interface guidelines, along with assets to use when implementing this.
Apps using Apple Pay are featured on Apple.com and in the App Store. Apps should also clearly highlight the addition in their update / release notes.
Q10 | What ongoing support is available?
Ongoing support falls on you, and your payment provider. Apple provides developer support in its developer forums.
Q11 | How do I process returns?
In-app the returns / refunds process doesn’t change from most current processes.
In shops, merchants can use the Device Account Number to find the purchase and process the return, just like you would with a traditional credit or debit card payment. To see the last four or five digits of the Device Account Number on iPhone, ask the customer to go to Passbook. Then, tap the card, and tap on the lower-right corner of the display.
On Apple Watch, ask your customer to go to the Apple Watch app on iPhone; tap Passbook and Apple Pay, and then tap the card used for payment. You can also ask the customer to provide their registered credit or debit card, and process the return using that card.
Q12 | Will I be liable for fraud on Apple Pay transactions?
Within apps, Apple Pay transactions are treated more favorably than standard credit and debit cards transactions, and liability for the transaction is typically shifted to the issuer. Contact your payment provider to verify how you can benefit from liability shift for Apple Pay payments within your app.
Within shops, Apple Pay transactions are treated in the same way as your current credit and debit transactions. You will have the same liability rules applied to Apple Pay transactions.
Q13 | What are the options for enabling seamless payment for others?
There are a range of suppliers offering good in-app payment solutions. Broadly, they fall into two camps: Wallets like Apple Pay, which already hold customers account details; and card-on-file operators who have seamless mobile checkout experiences.
Examples of the Wallet approach include Paypal, who, similar to Apple, offer a button that can be embedded in your checkout flow. Google and Samsung’s wallet solutions, both launching this year, are further examples.
The approach offered by payment providers such as Stripe and Braintree offers a mobile optimised checkout flow with data entry minimised. Both also offer the option to integrate input shortcuts such as Apple Pay and Paypal.
Q14 | So which service should I use?
Which (if any) of these services to adopt depends on the demographics and device usage of your customers.
There is no ‘one-size-fits-all’ answer: each checkout requires careful consideration to maximise conversion and return, while ensuring convenience and security for your users.
If you have any more questions regarding Apple Pay, drop us a line here.