Apple Pay could be viewed by many as a ‘non-event’ from a disruption standpoint, while many others may see its value in potentially building a whole new ecosystem. Unlike many other efforts in the past, the way Apple is trying to carve this out is by building strong forward and backward integration, ensuring seamless delivery and enforcing privacy & safety guidelines as an integral part of the Apple Pay product. The alliance with issuing banks, making card numbers not known to anyone in the chain are all inherently pointing to one goal Apple wants to Pay to be the preferred standard for mobile payments. With the scale that Apple has combined with the projected user experience, this could be a reality – at least in the immediate future. Let’s dive deeper into how mobile marketing could be strengthened using Apple Pay.
As mobile marketers, we constantly ask 3 questions:
1) How can I acquire more leads through mobile channels?
2) How do I convert these leads to actual paying users using the mobile channel?
3) How do I ensure that the costs of the acquisition remain low and comparable to other mediums like say Search & Social.
Can Apple Pay lead us mobile marketers somewhere with this quest of ours? It just might.
Boost in MCommerce
With an unprecedented rise in smartphone penetration and with 86% of the ‘mobile’ time being spent on apps, it should only be natural to expect actual transactions to materialize on mobile. While it is true that 42% of mobile users are using smartphone research to decide on products and services, they are not exactly using mobile as a ‘ purchase medium’. An exceptionally high 74% of mobile purchase consideration actually ended up being transacted either in stores or on the phone.
Apple Pay introduces a seamless way to transact on the phone without really taking out the Credit Card each time. With the user’s credit card details safely stored on the secure element on the device, users can now conduct in-app or mobile web transactions very easily. The ‘drop off’ points within the conversion funnel can be hugely reduced with the adoption of Apple Pay.
Digi-Capital says mobile commerce is slated to grow to a whopping $516 in 2017 from where it was in 2013 – $133 Billion. Although Apple’s OS share could further decline, as the revenue leader a bulk of the aforementioned $516 could go into Apple’s coffers.
The location has been a key advantage that mobile marketers have been but with moderate success. But with Apple Pay, there could be a significant strategic lever that mobile marketers could use to influence potential customers. Tim Cook in his September 9th launch positioned Apple Pay more as a convenience tool – understandably so as to please a mass audience. However, for marketers, the real scoop could be its inclusion in the PassBook app. Apple’s Passbook is where physical coupons and passes. Combine this with the iBeacon technology developed by Apple and we have a game-changer. iBeacon is a transmitter and receiver built into their devices and iOS7 to receive relevant messages. Think of it this way: You enter Macy’s store with Macy’s app in your iOS device. Macy pushes a coupon, say valid for 2 hours in the form of notification through iBeacon app. The coupon stays in your Passbook and could be integrated at the check out process. It’s up to brands to imagine how they can best use such an integration.
New Ad Formats & User Flow
The (almost) never-before combination of Passbook + 1-Touch Pay along with fairly precise location targeting gives mobile marketers space to be creative. Coupon banners with an Add to Passbook’ button which can later be redeemed through Apple Pay. So a user along with the user flow, ie First Touch to Checkout can be influenced. The first touchpoint need not be banners or ads, the options are plenty – email, SMS, In-App Notifications, etc.
As in any new initiatives, there are serious challenges – the biggest being adoption. For marketers to have a sustainable, reliable new format or channels, there needs to be reach and volumes. The adoption will depend on factors like perceived privacy threats, Habitual switch from Plastic to Tap, buy-in from merchants, seamless integration across Card Provider, issuing bank, merchant PoS, etc. All this in addition to the tons of regulatory clearances and scrutiny, a product of this scale will need to endure.
It will now be very interesting to see how Google responds to this. With 52% global market share on OS and an even bigger share of devices, Google has a good, ready to adapt the template to replicate. Google also has an existing Payment gateway int the form of Google Wallet. Some forward and backward integration, hardware and security adaptation and well… Google could have a ‘ Google Pay’ ready.
If you have thought of more ways to capitalize Apple Pay for your mobile marketing campaigns, do share with the MobRulers community.