Apple’s much-anticipated announcements of the iPhone 6, iPhone 6+ and the Apple Watch rekindled enthusiasm for the company’s game-changing technology – or at least its marketing. Much of the public attention was focused on the long-rumored and soon-to-be-here wristband device.
From the retail industry’s perspective, however, the real game changer in the bundle of goodies was the introduction of NFC (Near Field Communication) capabilities as part of the new iPhones and watch.
NFC allows a credit card transaction to be initiated without having the card (or in this case, the device) come in contact with your POS system or terminal. Sometimes this is referred to as “tap and go” or “contactless.” Apple has wrapped it in a slick marketing package it calls Apple Pay (the website crows: “Your wallet. Without the wallet.”)
Most terminals today are not enabled for contactless transactions. Until the announcement by Apple, it was always an esoteric discussion about which would come first, the terminal base at retail stores or the card (or iPhone) base in the pocket of consumers.
Apple’s products will likely settle that debate in quick order. Its legions of consumer fans will create the demand that card issuers and retailers must satisfy. Are you as a retailer ready for this major change?
How big a deal is this? Well, last year, with a much less anticipated rollout of the then-new iPhone 5 models, Apple sold nine million units the first weekend the hardware was available. Apple then sold another 30-50 million units each quarter. This means that in any given year, a significant number of your customers will be carrying a new iPhone or Apple Watch.
Clearly, due to the sheer number of iPhone users in the U.S. (and around the world), the chicken-or-egg question is now a moot point. We will, very shortly, have a large number of cardholders who will be carrying contactless credentials in their pocket. And, much like the six-year-old with his first allowance, it will be “burning a hole in his pocket” to use these devices to purchase goods or services.
Again I ask, are you ready?
Today, the primary terminal that will support a contactless transaction is the VeriFone Vx 520. The other benefit to this unit is that it will also handle the new chip-card transactions, once the processors and the card brands finish the system changes to accommodate the “dipping” of cards to include the chip.
If you don’t have a contactless-ready terminal, now – that’s now, not later after you disappoint your customers – is the time to consider upgrading. Reach out to our customer service team at 800.563.5981, option 2, to discuss how to upgrade your terminal.
John Mayleben CPP is Michigan Retailers Association senior vice president, technology and product development, and a national expert on electronic payment processing. He was the first person in Michigan and among the first in the nation to receive the Certified Payments Professional designation from the Electronic Transactions Association.
