COIT20250: Apple Pay - E-Business Systems Report, Term 1, 2019

This report offers a comprehensive analysis of Apple Pay, a mobile payment system developed by Apple Inc. It begins with an introduction, highlighting its security features and potential for future dominance in the purchasing system market. The report then delves into the market history, contrasting Google's initial efforts with the adoption of NFC technology by retailers. It explains the technical workings of Apple Pay, including its use of tokenization and dynamic security codes, emphasizing its fraud-prevention measures. The report also covers the acceptance of Apple Pay in various stores, in-app purchases, and transportation systems. It examines the UK market, including contactless payment trends and the launch of Apple Pay. Furthermore, the report discusses Apple Pay's competitors, such as Barclays bPay, Android Pay, and Samsung Pay, and explores future trends in seamless payments, including Amazon One-Click and the integration of loyalty cards. Finally, it addresses how Apple Pay enhances accessibility and discusses potential developments in the payment landscape.

Apple Pay

Introduction
• It is a product of Apple Inc.
• It is a unique system for payment which
is very secured for customers and banks

Introduction
• Helps in fraud elimination
• This application is secured and there
are possibilities that it would become
the most popular purchasing system
used in future

Market history
• Google had taken the first
initiative, retailers did not
contribute (Burge 2015)
• Only 2.4% of all the
retailers had NFC
• Chip and PIN deadline had
been October 2015
• Retailers had updated POS
systems

How it works
• It automatically uses cards
on file for the customers
who had set Apple’s iTunes
as the default payment
account
• Customers can add more
cards
• The company verifies the
account data with card
issuers

How it works
• It uses tokenization for removing card
number used for payment
• When a user adds credit card, Apple
does not save the card number, it
generated a device only account number
(Burge 2015).
• Every time it is used, company makes
use of a number that is used for one
time payment (Beznosov and Kim 2017).

How it works
• A dynamic security code is also
provided
• Eliminates the need of static
security code
• Merchant never gets to see the
name, security code or card
number of the card holder.

How it works
• Users of iPhone 6 having an
account of iTunes enter their
security code for continuing.
• Users can also add extra
account by taking a picture
of passbook (Burge 2015)
• Provides a secured and error
free payment, compared to
• other applications

Acceptance of Apple Pay
• In various stores
• In various In-app purchases
• Transportation in London

In store
• Used by high street retailers in UK
• Potential of being many more because it uses
NFC readers which gives access to technology
for contactless (Beznosov and Kim 2017)

In-app
• Option of extra payment

London Underground
• Tickets or Oyster cards are not needed
• Used in Apple watches and iPhone
• User create an account on the website of TfL in order
to view journeys along with their payments
• Users find it simple for applying for refunds when
they do not want a product or service

UK Market

Contactless in the UK
• 70 million cards have already been issued
• Around 25,90,000 bank-owned terminals are available
• Around £2.5 billion had been spent in the year of
2015
• In the year of 2014 around 27% of all the transactions in
card had been were contactless

Contactless in UK
• In the month of June, 2015
– More than 80 million of transactions had been
trebled since the month of May, 2014
– Average revenue spend was around 6.98 Euro
• In the month of September, 2015
– The limit of transactions had been raised to 30
Euro
– This had not been implemented numerous retailers

Apple Pay in the UK
• Apple Pay had been launched in UK in14th of
July in year 2015 and there had been1 million
transactions in few days.
• The limit of payment had been limited to £30
(Fehr 2018)
• With the help of ID confirmation, it provides
extra value of transaction.

Apple Pay had been available at most of the banks
• NatWest
• Lloyds
• Bank of Scotland
• Santander
• HSBC & first direct
• Halifax
• Nationwide

Devices of Apple Pay
• Models of iPhone 6
• Apple Watch
• 80% of owners of Apple Watch make
use of Apple Pay

Usage Apple Pay

Set up of the Apple Pay
• Open a Passbook or a Wallet
• Tap to the option link a new card
• Photograph the card
• Add a particular security code

Competitors of Apple Pay

Barclays bPay
• Fob, Sticker and wristband, they
are purchased separately
• They are pre-loaded from a
particular account
• They are limited to UK Visa as
well as Mastercard (Fehr 2018)
• They do not required any
additional security
• They have a mobile application
for tracking the spent as well as
top up

Android Pay
• It had been released in the end
of 2015
• Payment had been available In
store with the help of NFC as
well as In app (Fehr 2018)
• It is a direct competitor

Samsung Pay
• USA had been released on 28th
September
• It has been available on
–Models of Galaxy S6
–Note 5
• It makes use of Magnetic
Secure Transmission (MST)
• It can be used on swipe
machines

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Samsung pay

What’s else?

Options of seamless payments
Amazon One-Click
•It differentiates various
service
•It has been Driving loyalty

Enable the spontaneity economy
• It allows a high rate of browsing on the field of e-
commerce
• Users usually switch to the desktop for the purpose
of checking out
• It is very complex to enter complete details on the
phone (Beznosov and Kim 2017)
• Phone payment can increase the number of
spontaneous purchases

‘Zero interaction’ in the experience of retail
• Pick a particular item
• Scan it
• Carry out the payment from the
application

Loyalty cards
• Integrate the mobile payment by earning loyalty
points to for promoting seamless checkout
• Along with Wallet iOS9

Improving the accessibility
• Users of wheelchairs might not be allowed to reach
as well as see PIN pan, it would be easier for them to
hold a phone
• People who have limited mobility of hand would be
allowed to use fingerprint ID and they do not have to
expose the security by telling someone else to type
PIN (Beznosov and Kim 2017).
• People would not have to remember PIN, it would be
easy for people with difficulties in learning or a mild
dementia.

What’s next?
• Seamless payments that are available in
applications might encourage websites of
application usage as well as response
• More conversion rate would be available on
mobile
• Increase in the number of small purchases

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