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Why should businesses use and accept Apple Pay?

Apple Pay is a popular payment method with Apple users, and many organizations have added the option at checkout. Find out why it can be beneficial to accept Apple Pay.

If organizations want to provide customers with all the most common payment options available today, they should look into Apple Pay and its potential benefits.

Apple Pay is Apple's mobile payment platform, which stores users' credit card data and enables them to make purchases directly with an iPhone, iPad or Apple Watch. As a contactless payment method, Apple Pay offers convenience and ease of use for customers, and the setup process is simple for businesses as well.

However, IT decision-makers should learn more about Apple Pay's pros and cons before implementing it for their organization.

Are there drawbacks to implementing Apple Pay?

Not every merchant supports Apple Pay. This problem isn't specific to the Apple service -- Walmart, for example, doesn't accept any contactless payment method besides its own digital wallet, Walmart Pay. For Walmart, this might be a way to encourage the use of its digital wallet and mobile app. For smaller organizations, reluctance to implement Apple Pay and other contactless payment methods might come down to the setup process.

While the setup process is straightforward, it does require organizations to make sure that they have the right technology and, if not, purchase new technology. To accept contactless payments, organizations need to have point-of-sale (POS) terminals with near-field communication (NFC) capability. IT teams must also confirm that their payment processor supports Apple Pay and take steps to meet software and security requirements. Before taking on this process, organizations should make sure that Apple Pay is a good fit for them.

Benefits of using and accepting Apple Pay

Most U.S. retailers accept Apple Pay, but its prevalence isn't the only reason to adopt the contactless technology. When considering why they should accept Apple Pay, organizations can look to customer experience, security and affordable setup.

Mobile payment methods can enhance customer experience

Contactless payment provides a smooth, efficient checkout experience. For users to set up Apple Pay, they should open the Wallet app on their Apple device and add the information for any desired credit, debit or prepaid cards. After that, they can use that device to make payments anywhere that accepts Apple Pay -- online or in-store.

When shopping in person, a customer can simply open the Wallet app on their device, select the card they want to use and hold the device near the NFC card reader for a few seconds to make a payment. When making online or in-app purchases, a customer can choose Apple Pay as the payment method, select the card they want to use and confirm the transaction.

Diagram showing the steps to make a payment through a digital wallet app.
Digital wallet apps such as Apple Pay provide a simple checkout process.

Because of this convenience, Apple Pay is the go-to choice for some users. Whether a customer just prefers the mobile payment option or left their physical wallet at home, accepting Apple Pay can help organizations ensure that the purchase goes through without difficulty.

Apple Pay's encryption system provides strong security

There are also some security benefits that come with using Apple Pay. For customers, Apple Pay ensures secure transactions by requiring user authentication. To authorize a purchase, customers must use their Touch ID, Face ID or passcode. If a user loses their device and has Apple's Find My feature turned on, they can place the device in Lost Mode to suspend Apple Pay rather than having to cancel their cards.

Apple's policy of encrypting card data and tokenizing transactions is helpful for customers and vendors alike. When a user successfully adds a card to Apple Pay, their bank or card issuer will create a device-specific token for it, called a Device Account Number. Apple Pay uses this token to complete transactions, protecting bank account information. The Device Account Number is never stored on Apple servers or backed up to iCloud, and Apple doesn't have access to the original card numbers. This keeps customer data safe and encrypted at every level. During Apple Pay transactions, vendors don't receive customers' actual card numbers, so they also don't have to deal with sensitive data in their payment systems.

For smaller organizations, reluctance to implement Apple Pay and other contactless payment methods might come down to the setup process.

Setup is affordable and flexible

Apple Pay comes with very few extra costs, if any. As long as an organization doesn't have to get new equipment or switch to a new POS system, there won't be setup fees to accept Apple Pay. When a customer pays with a credit or debit card through Apple Pay, the only merchant fees are those that would already be in place with a regular card transaction. Plus, if a customer pays with Apple Cash from their Wallet app, it's fee-free.

Apple provides other services that businesses can consider in tandem with Apple Pay. When taking the steps to accept Apple Pay, organizations should also look into accepting it as an online payment option on their e-commerce sites. For in-store purchases, some organizations could even implement Tap to Pay to use an iPhone as a payment terminal. This flexibility enables organizations of all sizes to offer a popular payment method to customers with relative ease and minimal costs.

Of course, Apple Pay is only available on Apple devices, and not every customer is an Apple user. Organizations should also offer other contactless payment options, such as Google Pay, to accommodate more of their customer base. Contactless payment methods all rely on the same NFC technology, so it's easy to set up both options.

Katie Fenton is associate site editor for TechTarget's Mobile Computing, Enterprise Desktop and Virtual Desktop sites.

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