Why You’re Not Using Apple Pay

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(This post originally appeared on Forbes)

You’re not using Apple Pay, are you? Yeah, you’re not alone.

At first, things seemed to get off to a fast start for Apple’s new mobile payment service. Within days of its October introduction, it was reported that a million people had signed up. And not long after, Google Wallet reported a 50% increase in transactions for its competing NFC (Near Field Communication) service. However, adoption is still very slow. In fact, a recent report from InfoScout revealed that only 9% of iPhone 6 users have actually tried Apple Pay and “…despite its hype within the tech community, Apple Pay still has a lot of ground to cover. Out of all Apple Pay-eligible transactions on Black Friday, the new NFC-powered mobile payment method was used less than 5% of the time.” Another report warned that “only 6 out of every 1000 consumers who walk into a store will likely use Apple Pay, provided of course that they are in a store that accepts it, which means that the merchant has NFC.”

Yeah, you’re not using Apple Pay and you’re not alone.

And yet when I ask my friends and clients if they would prefer to use a smartphone to pay instead of a credit card the overwhelming answer is yes. We know that it can be more secure particularly as finger-printing recognition matures. Consumers appreciate the ease and speed and convenience of tapping a phone on a terminal and never having to carry around a piece of plastic. Businesses get the benefits of quickly integrating with their accounting systems, merging their data with other services to better analyze their customers’ patterns and being able to better market, promote and offer incentives with mobile services that will complement Apple Pay or Google Wallet. So why aren’t you using Apple Pay?

It’s not because you don’t have an iPhone or even an iPhone 6. Even though the iPhone 6 and Apple Pay was recently released, Google Wallet has been around for years and no one has been stampeding to use it. You may be paying for your latte using Starbucks’ app (although I’ll argue that it takes me the same amount of time to pay with a single swipe of my credit card, particularly when I don’t need a receipt). But other than that, just admit it: you’re still using credit cards. You’re still pulling out the plastic at Bloomingdales, Macy’s, Duane Reade, McDonald’s, Petco, Panera Bread, Staples, Nike, Walgreens, Subway and Whole Foods although all these places accept Apple Pay. When will this change? What will be the tipping point when credit cards finally go the way of cassette tapes and cloth diapers and your mobile phone becomes your only form of payment?

Some predict that it will happen around 2016, when iPhone 6 adoption plateaus and the Apple Watch hits its stride, assuming it does hit its stride. Others point to the time when contactless terminals are pervasive. Many believe that it will be a generational transition, something that will happen over the next 3-5 years as younger users who are more adaptable to making payments with their mobile devices mature into more influential buyers. And all of this is true. But there’s one way to get us to the tipping point much, much faster: just make it cheaper for businesses.

If you’re a small business owner, a merchant, a restaurateur, what’s your incentive to use Apple Pay or Google Wallet? Are you paying less fees? Nope. It’s still the usual 2-3% per transaction. Not only that, you’re being asked to purchase contactless terminals, upgrade your point of sale systems, teach your employees new procedures and adapt to a different way of paying that’s being used by a tiny fraction of your customers. The credit card companies, Apple and Google are giving no help to these business owners. And yet, these same companies would potentially reap significant cost savings if those same merchants were to abandon plastic. How? Less fraudulent transactions, lower processing costs, better data analytics and let’s not forget significantly reduced expenses from manufacturing, authorizing, securing and mailing tens of thousands of new pieces of plastic every day.

Will this happen? Would Apple or Google or Visa or MasterCard pony up a slice of their billions in the form of reduced transaction fees to businesses who accept payments via these mobile services? Probably not. And you can’t blame them. They’re happy to keep fees the same and wait a few years for adoption to happen. Because…why not? Whether it’s Apple Pay or plastic, they might as well maximize their own profits. Unfortunately for your business, you’ll have to incur the costs necessary to accommodate everyone – from the guy who insists on paying cash to the kid who only wants to pay with her phone – rather than losing the sale.  Will this maximize your profits? No.

And that’s why you’re not using Apple Pay.

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