Will Apple Pay bear fruit for UK businesses?

The vast majority of small businesses don't believe Apple Pay will have a material impact on their operations, but is this flawed thinking? Jason Richelson, CEO and Founder of Shopkeep, offers his insight.

Predicted consumer adoption rates will undoubtedly dominate headlines following the UK launch of Apple Pay today, but it's on the other side of the counter where we see the really interesting story.

In research carried out by ShopKeep, the vast majority of smaller consumer-facing businesses with 1-50 employees are positive about Apple Pay, but don't believe it will have a material impact on how they operate. Our experience in the US says this thinking is flawed.

Business owners in the US that have been quick to embrace mobile payments are growing three times faster than the national average, and going out of business much less often (5 per cent fail within one year vs the 25 per cent national average).

There are several factors that lead us to predict consumer adoption rates that dramatically outpace the US precedent: the early adoption of Chip and PIN; the comparative success of contactless cards; the fact that the UK now spends more on card than cash; and the decision by TFL to accept this form of payment on London's public transportation.

People will expect cashless transactions wherever they go and if smaller businesses in particular want to prosper, they must embrace the technology.

These systems have become readily available and inexpensive over the last few years and implementing them will assist in delivering an improved customer experience. Put it this way, any business that wants to exist in the future has to prepare for it.

UPDATE: Other industry experts have offered their thoughts on the impact Apple Pay will have on UK retailers.

Sarah Kellett, Associate Director, Consumer Facing Industries at Fujitsu UK & Ireland: "The launch of Apple Pay is yet another step towards the mobile wallet and contactless agenda, and we expect this service will see significant pick up amongst iPhone users. Until contactless becomes more widely available however – on multiple operating systems and devices – the launch of Apple Pay is unlikely to revolutionise the retail payment landscape.

"Having said that, retailers still need to be aware of new payment services such as ApplePay, as these services are allowing customers to make payments from any location at any time, just by using their mobile device.

"Retailers who fail to see the opportunity with ApplePay and mobile payment services risk placing a barrier at the point of sale. Ultimately the more payment options available to customers, the easier it will be for retailers to make transactions and as a result, sales."

Rupert Blackham, Innovation Consultant at Global Commerce provider, Salmon: "The launch of Apple Pay could revolutionise the retail landscape - digital wallets offer a wealth of opportunities for retailers and drive value for customers, making in-store payments more efficient, convenient and secure.

"However, it does bring with it some challenges that retailers need to be aware of. For example, data capture is not possible through contactless ApplePay. Retailers will need to develop new ways of utilising data capture if they are to harness actionable insights, improving the customer experience by better understanding them and delivering more tailored service.

"Similarly, retailers will need to review the returns process. Using ApplePay means there will need to be reconciliation against the online purchase card and the ApplePay device serial number, which will change the retailers’ internal processes.

"It is expected that ApplePay will see traction with consumers, with adoption by the likes of TfL helping to drive the adoption. In order to see a smooth adoption of ApplePay with retailers however, businesses in the sector need to work with technology partners to ensure they utilise the benefits Apple Pay brings, but are most important ready and prepared to do so."

Check out our Apple Pay hub for everything that businesses need to know