Today is the day Apple Pay debuts in the marketplace, and SVP Eddy Cue tells The Wall Street Journal that the company expects a slow adoption of the service by retail stores, and also expects to see in-app purchases making up most of the transactions in the early going.
“We’re trying to do something that I think is a game changer and it requires a lot of people to play together. There’s a lot to do here and we have a lot of work to do, but it should be huge.”
While Apple’s initial list of merchants participating in Apple Pay is impressive, many large departments store chains, such as Walmart, have yet to sign on. Many of the stores that have signed on have yet to install the payment terminals that will allow them to process payments via Apple Pay.
Another drawback in the early going for the new mobile payments service: the store’s own credit cards don’t work with Apple Pay. Macy’s estimates over half of its customers use the store’s own credit card, which is tied to their loyalty program. Macy’s says it will add the card to Apple Pay “eventually.”
Apple’s new payments service only works for in-store payments with the company’s new iPhone 6 and iPhone 6 Plus handsets, as they are the only iPhones that include near-field communication (NFC) capabilities required to communicate with the payment terminals. The Apple Watch will also include NFC when it is released in early 2015.
Apple Pay launches today – Monday, October 20 – alongside iOS 8.1, and will allow customers to pay for merchandise and services at participating retailers by using their iPhone’s built-in NFC and Touch ID components. Participating payment networks include American Express, MasterCard, and Visa. (Discover says it will join the party at a later date.) Participating merchants include Macy’s, Walgreens, Bloomingdales, Office Depot, McDonald’s, and Subway.
