The big Apple to square off against online payment giants


Recently H&M opened its doors here in Australia. Devoid as we have been for some time down under of fast fashion, the past few years have seen a flood of global retailers open on our high streets, including Zara, Gap, Uniqlo and Forever 21 to name a few.

In my university days overseas, H&M was a regular haunt. The clothes were (and remain) almost embarrassingly cheap (provenance anyone?) and the on-trend designs were always a draw.

So on a Thursday night last week, at a loose end while I waited to meet some friends for dinner, I was lured in once more by the ‘SALE!’ signs in the glossy white H&M windows, deciding I would kill some time ‘just browsing’ until I was due at the restaurant.

Of course, it wasn’t long before I was sucked in by the lure of the many bargains on offer. After jostling my way through the frenzy of shoppers, I decided upon three items I was willing to purchase on the off chance they fit, not brave enough to tackle the queue for the fitting rooms, and willing to gamble $50 on my purchase.

Feeling a little guilty for ending up parting with cash when I had only intended on looking, I made the trek to the checkout, rationalising each purchase in my head as to how it would ‘fit in’ with my existing wardrobe. Budget out the window, I was ready to part with my hard earned $50.

As I rounded the corner I was met with a rather unappealing site – a checkout queue that snaked around several posts. Not even H&M’s contactless payment devices were making significant headway with these shoppers.

Now while I might still occasionally shop at H&M, one thing that certainly has changed in my 10 years out of university is my patience for queues. Whether they’re at bars, shops or restaurants – queues are a deal breaker. I mentally weighed up the pain of standing in line verses how badly I wanted the garments. I checked my watch – almost time for dinner. I covertly hung the clothes on the rack next to me and made for the exit.

I’m certain my wallet breathed a sigh of relief as I exited, however there was a twinge of annoyance and regret about my abandoned purchase. Sure, I can go back to H&M at any time, but it’s unlikely I’ll ever find those items again. The whole experience certainly made me wonder, why, in 2015, when you really want to buy something, does it still have to be so hard?

In store payments broken

Even high end retailers struggle to get this right. Earlier in the year a friend was visiting Sydney from New Zealand and had specifically wanted to purchase an item from Louis Vuitton. Unfortunately for her, the visit coincided with Chinese New Year, a period which invokes Black Friday like shopping volumes and swathes of Chinese locals and tourists hitting up their favourite luxury goods retailers. Upon entering the store, which was swarming with people, we were told the wait to be assisted simply to purchase something would be up to an hour. An hour!? We’d entered planning to purchase and we couldn’t even buy. It was a mildly ridiculous experience.

What should this look like then? As a shopper, I think many of us are well placed to describe the experience we do want when we decide to get off our laptops and head into the store. Seamless. We want to enjoy the process of shopping, rather than have it feel like a chore, with obstacles thrown across our path that make it harder, not easier, to buy. Shopping shouldn’t feel like a steeplechase. It should feel like a gentle stroll through a botanical garden, with plenty of time to stop and smell the gardenias.

Apple Pay launches online payments

So it was with interest that I followed the announcement this week from Apple about its eponymous Apple Pay being available at online checkouts this fall. If anyone is going to make a customer payment experience beautiful, surely it’s going to be Apple.

And well, that’s pretty much what they announced – one click shopping that’s safe and easy. Soon retailers across the globe will be sporting Apple Pay buttons for lucky Safari browser users. Instead of entering in card details and exposing your personal details to the servers of every retailer you shop at, you’ll be able to do it once, with Apple. Verification of your payment will be made via Touch ID on your phone or a few taps on the side of your Apple Watch. Brian Roemmele, Apple evangelist and founder of Pay Finders has a great run down on how it will all work (beautifully of course) in this article on Medium.

PayPal will certainly be taking notice of Apple’s long anticipated move, not to mention the likes of Google and Samsung. PayPal already has its own one click checkout feature, One TouchTM  which it no doubt hopes to use as a form of defence against the big Apple. PayPal is reported to already be seeing staggering improvements with One TouchTM, with conversion rates north of 80%.

From online to offline

But back to my somewhat disappointing H&M experience – what about in store payments? Can Apple make those beautiful too? Can a retailer’s point of sale system just start talking to my Apple wallet for the purposes of paying? It is exciting to imagine the Apple announcement as opening the doors (perhaps just by a crack) to a future whereby checking out becomes synonymous with walking out. A future that says when I walk into a shop, I am automatically pre-authorised to spend up to a certain amount, can pick up some items off the rack and then simply walk out, my credit card debited automatically in the process.

It sounds dangerously intoxicating, but really it’s just translating what online payments are becoming, into the offline environment.

Point of Sale Clover sort of tackled this back in 2014 by integrating Apple Pay in-app payments with its cloud based point of sale, trialing the payment process in a local beer and burger joint. Punters who downloaded the venue’s app were able to order from their table and pay via Apple Pay, in-app. Confirmation of the sale was then tracked back into the Clover POS, just like it would be for a standard card present transaction.

But really, the magic is unlocking in store mobile payments in a way that doesn’t require you or I to download yet another app. Just like we’ve come to expect a credit card machine to accept all the cards in our wallet, it might not be that farfetched to expect all the point of sale systems in the stores we shop in to one day accept all the wallets on our phones – be they Apple Pay, PayPal or some other incarnation. And for us to not have to bother with queuing up to get our phone or our watch near a credit card reader in order to finalise our payment.

While retailers spend so long getting the lighting, store design and product looking perfect, it sometimes feels like they forget to take creative steps to optimise the one thing that really matters – conversion rates. Experience is more than just a nice waft of perfume when you enter the store, it extends all the way to how easy it is to buy the actual goods. Apple Pay and PayPal are making it easier to do this online. Time will only tell if they’ll rise to the challenge offline as well.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business.

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