Apple Pay for Retail Businesses Explained

Apple Pay is one of the most popular contactless payment methods and is currently outperforming its biggest competitors. Adoption rates for contactless payment methods have skyrocketed, with 67% of surveyed Australians claiming their use of digital wallet had increased in the wake of the COVID-19 pandemic. 

Another study found that 58% of surveyed Australians used Apple Pay as their preferred digital payment platform. Methods like Google Pay, Samsung Pay, and Apple Pay have become more popular as retailers have shifted to offering safe ways for their customers to pay. 

We’ve outlined everything you need to know about offering Apple Pay as a payment method, both online and offline.

• What is Apple Pay?
• How does Apple Pay compare to other payment methods?
• Does Apple collect transaction data?
• Which banks and credit cards support Apple Pay?
• How many cards can you use on Apple Pay?
• Do you earn rewards with Apple Pay?
• Which countries accept Apple Pay?
• 4 benefits of Apple Pay
• How do I start accepting Apple Pay at my small business?
• Are there fees for accepting Apple Pay?
• The future of Apple Pay

What is Apple Pay?

Apple Pay was made available to the US market on October 20th, 2014 and has seen steady growth since its debut. Apple Pay is Apple’s mobile payment system, or digital wallet service that leverages near-field communication (NFC) technology to allow customers to make secure, contactless credit or debit card payments at retailers around the world using an NFC compatible iPhone, Apple Watch or iPad. Basically, it’s a more convenient, and faster way to spend your money if you’re using an iPhone. 

From a business’s perspective, if you already accept credit cards, there’s a strong possibility that you’re already able to accept Apple Pay. When a customer comes into your store and wants to use Apple Pay to pay for their items, rather than pulling out their physical wallet, they reach for their iPhone, hold the phone within centimetres of your payment terminal, rest their finger on the Touch ID until they see the done checkmark. That’s it. The transaction takes a matter of seconds and there is no change to your checkout process.

In addition to in-store transactions, customers can also buy things online with Apple Pay. Apple authenticates the payment using the customer’s fingerprint or face, which is both faster and more secure than any credit card security method. Apple has committed to not collecting any transaction data, like what a customer buys, where they buy it or how much it costs. In addition, every Apple Pay card number is tokenized, meaning it’s a random card number that cannot be used again. Both you and your customers can be assured that your data is safe.

How does Apple Pay compare to other payment methods?

Apple Pay is a more convenient and faster way for customers to make payments. 

From a business’s perspective, if you already accept credit cards, there’s a strong possibility that you’re already able to accept Apple Pay. 

When a customer comes into your store and wants to use Apple Pay to pay for their items, rather than pulling out their physical wallet, they reach for their iPhone, hold the phone within centimetres of your payment terminal, rest their finger on the Touch ID until they see the done checkmark. 

That’s it. The transaction takes a matter of seconds and there is no change to your checkout process.

In addition to in-store transactions, customers can also buy things online with Apple Pay. Apple authenticates the payment using the customer’s fingerprint or face, which is both faster and more secure than any credit card security method. 

Does Apple collect transaction data?

No. Apple has committed to not collecting any transaction data, like what a customer buys, where they buy it or how much it costs. In addition, every Apple Pay card number is tokenised, meaning it’s a random card number that cannot be used again. Both you and your customers can be assured that your data is safe.

Which banks and credit cards support Apple Pay?

Apple Pay works with over 100 banks and card issuers in the APAC region.  

How many cards can you use on Apple Pay?

Customers can use up to eight cards when using Apple Pay. When a customer makes a purchase with Apple Pay, the set default card will be presented, but other cards can be chosen instead to make a purchase.  

Do you earn rewards with Apple Pay?

If the chosen card already has eligible rewards or benefits, then a customer will still receive them when using that card with Apple Pay. 

Which countries accept Apple Pay?

In the APAC region, Apple Pay is accepted in Australia, China, Hong Kong, Japan, Macao, Malaysia, New Zealand, Singapore and Taiwan. APAC Customers can confirm if Apple Pay is accepted in a store or when making an online payment if they see certain symbols displayed by the retailer.

4 benefits of Apple Pay

In today’s world, contactless payments have become more of a necessity than an added bonus. You can keep your customers and employees safe by including Apple Pay as a payment option at checkout.

1. Fast transaction times

For merchants in the throes of EMV frustration over longer transaction times, Apple Pay seems to be the one saving grace. An Apple Pay transaction may take 3-5 seconds to complete at checkout. For comparison, the average transaction time for EMV from insert to approval is about 10 seconds. 

2. It’s secure

NFC transactions like Apple Pay are just as secure as EMV transactions, and more secure than magstripe or swiped transactions.

Apple Pay leverages a payment security method called ‘tokenisation.’ What this actually does is, rather than store sensitive card data on the mobile device, it replaces that data with something called a ‘token.’ The token is just a random series of numbers or symbols that are used to represent the card data and are meaningless on their own. The only parties that can decrypt, or detokenize the token are the card networks that have access to the tool to do so, under strict security protocols.

3. Adoption and usage are trending up

Not only is it faster and just as secure as EMV, but like we previously mentioned, usage and adoption of this new payment technology has been growing. In 2014, when Apple Pay hit the U.S. market, only about 4 percent of retail merchants accepted it as a payment method. As of early 2019, that number has grown to 65 percent.

Consumers have been adopting Apple Pay in increasing amounts as well. In 2020, Apple Pay’s user base grew by 65 million people. Current data suggests that by 2025, 10% of all card transactions will be made through Apple Pay.  

4. Is there a limit to Apple Pay purchases?

The short answer is no. There isn’t a set limit on the amount customers can spend at stores using Apple’s mobile wallet service. However, the long answer is that merchants and card issuers can impose their own limits on what Apple Pay customers can spend. In Australia, you might have to enter your pin for purchases over $2o0 AUD.

How do I start accepting Apple Pay at my small business?

Start accepting credit and debit cards

If you don’t already, there is no better time than the present to start accepting credit or debit cards at your business. While cash may be king in some instances, consumer spending habits are quickly dethroning that idea and making way for the new successors of plastic and digital. Contactless payments are both convenient and safe ways for your customers to pay you. 

Is my payment terminal compatible with Apple Pay?

If you already accept credit and debit cards, you may already be equipped to accept Apple Pay and you don’t even know it. You should check with your credit card processor or terminal provider to confirm if you have a terminal equipped with an NFC reader. If you have one, you will most likely have to do an over-the-air (OTA) download to update the software in order to ‘turn on’ the ability to accept Apple Pay. If you don’t have an NFC ready terminal, the cost to upgrade is usually a few hundred dollars.

Lightspeed also offers Mobile Tap for Lightspeed Payments, through which SMBs can accept all Apple Pay, swipe, tap and chip payments on the go. 

Upgrade your point of sale system

Just like credit cards, if you’re not accepting them, now is the time to start. The same goes for a point of sale (POS) system. If you don’t currently have a POS system, now’s the time to start looking into one. Or if you have an outdated point of sale system, now is the time to think about an upgrade. In a world driven by customer analytics, digital payments and mobile devices, you can’t afford to operate with outdated technology.

Nowadays, most new POS systems have the ability to accept Apple Pay as a payment type. The majority use 3rd party payment terminals that are either standalone or integrated into the point of sale system. Integrated payments is the smart way to go because all of your sales and tender types will be calculated in one place. This saves you from having to do any manual tracking with a payment sheet or other tool.

Check your eCommerce platform

If you have an online store or are thinking about starting one, make sure that the eCommerce platform you use has the ability to accept Apple Pay. If it does, make sure you understand all the details of how you can implement it into your online store. Find out what gateway you can use to pass along the payments, what payment processors you can choose from and if any of them are supported by your point of sale provider.

Are there fees for accepting Apple Pay?

If you’re a small business owner that already accepts credit cards and debit cards, you probably pay some fees for processing those cards. With Apple Pay, your processing fees will remain the same. There is no additional charge or interchange fee for an Apple payment versus a traditional credit card payment.

When a customer pays with Apple Pay, processors flag it as a card-present (CP) transaction, which is the same way they flag a swiped or EMV transaction in your store. If a customer pays with Apple Pay in your online store, it will be flagged as a card-not-present (CNP) transaction, which is the same way it would be flagged if the customer had to manually enter their payment details on your website.

The future of Apple Pay

In March 2023 Apple introduced Apple Pay Later, a feature that allows customers to purchase items in four split payments over a period of six weeks. Customers can use Apple Pay Later for loans ranging from $50 to $1,000 with no interest or fees. Apple Pay later can be used in stores and online with retailers who accept Apple Pay.

Say goodbye to swiping

Apple Pay isn’t going anywhere, and is a great way to give your customers a safe way to pay for their goods in store. At Lightspeed, we’re committed to helping retailers get Apple Pay into their stores. Chat with one of our experts today to see how you can start offering Apple Pay as soon as possible.