Apple Pay from the Front Lines

It’s been a good three weeks since the new iPhone 6 arrived in the mail. It was a bittersweet moment as I had regretfully given up my iPhone 4S, primarily out of the geeky obsession that it was rumored to be the last product in which Steve Jobs was able to oversee development from start to finish. True or not, it led me to keep that phone much longer than my Samsung-loving family could bear. In fact, I threatened my wife I was going to keep the phone forever out of sentimental value. In the end, the $200 trade-in value got the better of her rational sensibilities.

As a banker, clearly the first thing I had to do was run out and test Apple Pay. Since getting the new phone I have used it about a dozen times. But as I make my way around to different clients, family and friends, I’m a bit surprised at how few people that moved to the new phone have tried Apple Pay. As such, a lot of people are quite curious as to how it really works and if it is living up to the hype. So here, loyal Gonzo followers, is a brief summary.

The Setup

First, the Passbook app has to be set up to accept credit/debit cards, which means agreeing to all of the necessary terms and conditions, which are not very different from any other app in the marketplace. In fact, there were fewer “terms and conditions” to accept than what I’m “forced” to do while logging in to a hotel Wi-Fi. Does anyone ever decline those hotel Wi-Fi terms and conditions?

Next, the cards within Passbook need to be set up. The cards can be manually input, but the best way is to simply scan an image of the card. It is super-fast, and from my experience quite reliable. It does have trouble capturing all of the information, though, if there’s not a strong enough contrast between the card itself and the text on the card. Once the scan has taken place, there is some manual input required, but it is quite minimal. For example, I imported four cards and it couldn’t read the expiration date on one of the older cards. Too much wear, I guess, but I’d hate to see how my wife’s card looks. Overall, importing the cards was simple and quick. So quick, in fact, I probably could have done it while waiting in the checkout line to make my first Apple Pay purchase. That’s not an exaggeration.

The last “setup” item is configuring the fingerprint scan. The process is the same as it was on iPhone 5. I performed a series of scans across the top, bottom, sides and edge of my finger to get a full digital scan of the fingerprint. After the full blood spectrum analysis and confiscation of my first-born child to ensure my identity, I was ready to go. In all seriousness, the phone prompts for a fingerprint scan, and it takes about 60 seconds, max.

The Purchase

Of the five comments I received from clerks at checkout lanes, three said they love how fast it is, one said customers seem to like it so far, and the last one I can’t repeat. But, boy was she funny!

Seriously, the purchase is blazing fast. In most cases, there is no signature needed (more on that later) and the transaction takes about five seconds to process, if that. The mechanics of it are straightforward. The phone is tapped to the terminal, which triggers the fingerprint scan, then, voila, you get a receipt. Two, actually, including a digital one that hits your phone about a second before the cashier hands you a paper receipt! If only gas stations had a payment method so convenient. Yes, it’s a credit card, I hope I entered that zip code correctly; no, I don’t have a loyalty card; no, I don’t want a car wash; and no, I don’t want a receipt!

While the Apple Pay purchase is fast, there may be some operational limitations at an individual company level. For example, even with the improved security around these transactions, Whole Foods still requires a physical signature for any transaction above $50, which is quite annoying because anyone who frequents Whole Foods can attest to the fact that sub $50 transactions are rare!

The Close

While there have been some reports of duplicate postings on users’ accounts, these were clearly limited, and early on. After doing a dozen different purchases at various stores (and via mobile app), there is yet to be even one hint of a processing issue, duplicate postings, anything. The real-time transaction alerts on my phone are a nice change, though.

In fact, if this whole process outlined above is simple enough for my almost 60-year-old mother-in-law to do, we seriously shouldn’t be worried about the user experience. What we should be concerned about, though, is my mother-in-law reading this announcement of her age and there being one less GonzoBanker in the world tomorrow.

One interesting side effect of my three-week experiment is worth noting. The big thing in mobile payments articles over the past couple of years has been the ability to alter consumer behavior, and honestly, I have to admit that this has been one of the biggest surprises. After using my iPhone for less than a month to make about a dozen payments, I’ve actually started to unintentionally reach for my phone instead of my wallet when it’s time to pay for something. Yikes.

If only our “traditional” means of banking were as simple and elegant as Apple Pay! Even with the most well-crafted and best-intended solutions across the bank and credit union spectrum, I’ve never heard friends at a dinner party bragging about their banks’ Internet banking site, or another mobile app being as cool as what we can now do with our iPhone using Apple Pay.

Cheers,
DJ

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