Apple Pay’s arrival in the UK this week has stoked plenty of excitement about using iPhones to pay for the Tube or your morning coffee at Pret. It’s curious, though, that this in particular is attracting all the attention, given that here in the UK we’re already perfectly familiar with payments via contactless cards. In fact, the truly transformative feature of Apple Pay — in-app payments — is in danger of being overlooked.
Smartphones are increasingly the primary point of discovery for things we want to buy, but there is a huge disconnect between time spent browsing and actual spend. This is primarily due to how laborious it is to tap in card details and billing addresses, and most people just give up.
Today only about 2% of global consumer spending happens online, despite the web being 25 years old — a telling imbalance. Whether that number winds up being 20%, 40% or 70%, we can all agree that it will be orders of magnitude greater than it is today.
And here’s where Apple Pay comes in. The perfect marriage of software and hardware, Apple Pay cuts out all the friction to buying on a mobile device. More than just elegant design, it also delivers the added security benefits of seamlessly integrating biometrics and tokenization into the payment process.
iPhone users will just need their fingerprint to buy a gig ticket on Songkick, order dinner on Deliveroo, or back a project on Kickstarter. This could give a significant boost to the UK’s app economy by dramatically increasing conversion rates for first-time purchases and keeping users engaged.
So, what can UK startups learn from early adopters of Apple Pay in the US? Might it usher in a new era of mobile commerce in the UK, forcing businesses to re-invent their brand and consumer experience to finally embrace mobile?
Apple Pay is already delivering huge returns for early adopters in the States. Conversion rates for crowdfunding platform Indiegogo more than doubled after it integrated Apple Pay. Some startups are even using Apple Pay to open up new mobile revenue streams and transform their business models. OpenTable evolved its reservation app into an easy way to pay the bill on your iPhone, speeding up turn-over times and ultimately boosting revenues for restaurants.
In the UK, high-street retailers will use Apple Pay to expand to mobile. Lush, for example, will offer Apple Pay in their mobile app to reach new customers and keep people engaged with their brand.
Higher mobile conversion rates with Apple Pay will also power huge growth for mobile-first start-ups. Consider Dice.fm and Bloom & Wild, which are revolutionising the way we buy things like gig tickets and flowers.
Easier mobile payments will spawn a new generation of apps to let you pay for small ticket items, on the fly, reducing the likelihood of missing the last train home while you queue at a ticket machine and letting you donate a pound to a charity when you don’t have change.
It’s just the start of things to come in the internet economy. At Stripe we’re also seeing a promising new era of social commerce on the horizon. In addition to the partnership with Apple Pay, Stripe works with Facebook, Pinterest and Twitter to support ‘buy buttons’ which will let users easily buy the ingredients for recipes they’re pinning, or the gig tickets their friends are tweeting about.
As mobile devices become more ubiquitous, the internet is suffusing into every industry. For businesses looking to take advantage of this, Apple Pay’s UK launch is game-changing. It enables mobile apps to achieve scale faster than ever before and businesses of all sizes to redefine how they engage with customers on mobile.