Apple’s Digital Wallet to Be a Closed System: Should merchants implement solutions that only serve some customers?

As merchants are evaluating the mobile payment landscape and determining which payment types to accept and which wallets to integrate with to provide loyalty and discount programs, there is a need to be pragmatic and evaluate the return on any efforts. It is easy to focus on making sure you can service all of your customers, and therefore want to accept as many solutions as possible, but it may be better to focus on a single solution that addresses as many of your customers as possible.

A recent report by Celent Research entitled “Apple in Payments: What to Expect?” concludes that Apple’s digital wallet is likely to be a closed system, allowing only iOS users to use the system for in-store and online payments. While Apple has built all of the components for a secure wallet into their eco-system, is end-to-end control/integration worth the cost to merchants of adopting a platform that will enable only 42% of U.S. market?

While supporting multiple platforms casts a wider net in terms of who you can support, it is important to remember that this only addresses the first purchase. If sufficient value is offered in exchange, customers may be persuaded to sign-up for your supported digital payment platform, eliminating the future benefits to supporting multiple platforms. Additionally, merchants would be wise to consider the whole cost, considering not just the integration and implementation costs (hardware and software), but also the change impact it will have on their customers and operations.

Merchants should consider the impact of supporting multiple digital payment types, both from the customer and associate perspective.

• Does providing multiple payment options create confusion and/or increase training costs?
• Does having multiple solutions increase friction at check-out?
• Are in-store payment options consistent with online and mobile options? Does having multiple payment options on these digital channels also degrade the customer experience?

The payments/wallet landscape is still just emerging and will continue to change rapidly over the next few years. As merchants evaluate whether to jump into this rapidly changing space, it is important to understand how any solution(s) impact operations across channels and most importantly, how solution(s) support your customer experience and relationships.