What does a merchant need to accept Apple Pay?

Apple announced that starting next month you will be able to use Apple Pay to make payments at some stores. When this blog was written Apple claims that it will be able to be accepted at 220,000 stores and counting. According to the Small Business Administration there are around 30 million businesses, granted not all need to process credit cards but many do. The amount that accepts Apple Pay is a very small slice of the total of all businesses. 

Why is this? For a merchant to be able to accept Apple Pay as a form of payment they need to have two things in place. The first thing they will need is a NFC (near field communication) enabled scanner that would allow their system to read the phone. The second piece to this puzzle is that the merchant needs to have a credit card processing company who supports Apple Pay.

Let’s first look at the issue of equipment. For a little history lesson contact-less payment first came around in the late 90’s with the most notable being Exxon Mobil’s “Speedpass” contactless payment system. Speedpass is a bit different than Apple Pay. Speedpass is a key-fab that the customer would be issued by Exxon Mobil which was read by the pump when they would make payment. This did not integrate in to the credit card processing company as it was an internal process. In the 2000’s issuing banks started issuing cards that were able to be read by contactless readers. The problem was that the merchants did not have the equipment to read the cards. This type of card is often found today and the popularity of them with bank issuers has risen and dipped over the years. As of today only about 10% of merchants have the capability of accepting cards that include NFC technology (Including Apple Pay). For example, Best Buy once had contactless readers in the stores but had decided to turn them off in 2011 due to the cost of supporting the platform. Total Merchant Services offered contactless payment system included with our free terminal placement program but discontinued the program due to lack of popularity. 

The second hurdle you must overcome is that the processor you are dealing with will have to have the capability of processing Apple Pay as a form payment. At this time Apple has partnered up with many of the large banks that back the major processors in the United States. The top six banks that Apple is working with are American Express, Bank of America, Capital One Bank, Chase, Citi and Wells Fargo. At this time it is not known as to what other banks will be involved and what processors who are sponsored by the top six will be able to process Apple Pay. 

In wrap up, the past attempts to get the merchants set up to accept contact-less payment were not very successful. The push before was made by card processors and card issuers. This time around it is being pushed by a large and ultimately influential company, Apple that may result in more merchants adopting some form of NFC technology to enable them to accept the Apple Pay as a form of payment. I am sure that eventually credit cards will be replaced by another device / chip or something else. However only time will tell where we will end up.

Total Merchant Services now offers the Ingenico iCT220 that supports NFC & EMV for free along with our services. If you would like to upgrade so that your business can process contact-less payment and smart cards feel free to reach out to me at 800.51.TOTAL / 800.518.6825.