The introduction of Apple Pay has consumers buzzing about new ways they can make purchases. iPhone 6 or 6 Plus users will shed wallet weight as they add credit and debit cards to their Passbook, leaving retailers to wonder—what does all this mean for the future of their businesses? Apple Pay certainly reforms how shoppers shop, but Apple Pay will also have a major impact on retailers’ check-out efficiency, payment security, and consumer expectancy.

No one likes waiting in line. It’s only human for customers to get antsy while waiting to make purchases—and for cashiers to grow anxious as they hear audible sighs from the back of the line, scramble to replace receipt paper, or wrestle with cards whose magnetic stripe won’t swipe. Apple Pay capabilities will allow retailers to have a more efficient and seamless check-out process, which can translate into quicker transactions and an enhanced customer experience.

“Apple Pay builds on existing infrastructure at thousands of registers across the country,” Connor Mason, a writer at Punchkick, explains. “That’s not to say it’s old news, but it’ll be virtually seamless for many retailers to implement.”

iPhone 6 and Apple Watch will come equipped with NFC technology to allow a simple tap or wave at the register—no swiping, signing, or printing needed. User confirmation with Touch ID prevents fraudulent transactions, more so than an imitable signature ever could.

Retailers can also take advantage of Apple Pay within their mobile apps. Consumers often report frustration when navigating the purchase process. By adding Apple Pay with Touch ID authorization, merchants can focus on what matters most to business—customers who make purchases and return again for more. Companies will have a great opportunity to partner with iOS developers around Apple Pay. Mason believes that by making Apple Pay something more than a credit card replacement, it will become a platform that everyone wants to tap into, to further revolutionize mobile e-commerce.

Apple Pay will connect retailers with their consumers on an entirely different level. John Norton, a Punchkick iOS developer, explains that by paying with their phone, whether in person or in app, the merchant can learn more about their customers and offer benefits like rewards, brand loyalty programs, or new bonuses that are yet to be imagined. “Sometimes referred to as ‘closing the loop’, retailers can learn what their customers buy, when they buy, and maybe even why they buy,” says Norton.

“Whether this capability comes from the retailer’s app interacting with Apple Pay on some level, or from the use of a strategically placed iBeacon on the checkout counter, the retailer will be able to match up buyers with purchases and marketing efforts—and also interact with those customers based on all that new data.”

In order for consumers to feel confident using Apple Pay, they have to know their information is secure. But consumers aren’t the only party concerned with security—retailers want to protect their shoppers—and themselves—to ensure the best experience with their brand. Apple Pay is a long-needed solution to payment security issues. What Apple Pay does for the individual consumer is magnified tenfold for retailers that process massive amounts of consumer data. Users have secure access to their payment cards on their devices, safeguarded behind Touch ID authorization, which is never visible or accessible to the person behind the register. For retailers, not storing credit card numbers is a huge weight off their shoulders—security breaches will become a nightmare of the past.

Chris Cieslak, a developer on Punchkick’s iOS team, believes that Apple Pay changes the game for transaction security. “There are two major security breakthroughs that Apple Pay presents to the consumer,” he says. “First is what it doesn’t do—Apple Pay never transmits your credit card numbers.”

“Apple Pay never transmits your credit card numbers,” said Cieslak. “Instead, it sends a one-time transaction code to verify customers’ accounts whenever they pay with their phones.”

This means that cashiers and, by extension, the retailer, never has access to private card information, which removes a massive liability.

“Second is the hardware-based level of security that doesn’t exist on most electronic payment solutions,” Cieslak continued. “Touch ID on the iPhone and authorization measures on the Apple Watch prevent potential identity thieves from making purchases with stolen iOS devices.”

In fact, payment card information is never ‘stored’ on the iPhone in any traditional sense. Mason explains, “each transaction is a kind of smoke-and-mirrors exchange between the merchant, the user’s bank, and the unique payment card code hidden in the iPhone’s ‘Secure Element.’” This means that even if someone were to steal an iPhone, users wouldn’t need to cancel their credit cards to stay secure. Retailers will benefit from the improved purchasing experience because customers will associate safety, security and ease of transactions with their brand, versus customers wondering if they feel comfortable even shopping there.

 

Customers who leave their wallets at home will no longer be exempt from shopping in their favorite stores, since smartphones are much more difficult to forget. Those carrying an iPhone 6 will have everything they need to shop at retailers that accept Apple Pay—and that’s a major opportunity for retailers to differentiate themselves.

“If one store accepts Apple Pay and a competitor doesn’t, that could help a lot of Apple fans make their buying decisions,” says Mason.

Retailers know that the customer experience is of the utmost importance to their company—brands that meet their customers’ expectations cultivate loyalty and retain business in the long term. With Apple’s impressive adoption rate, iPhone 6 owners will soon be demanding to make purchase through Apple Pay, which could introduce potential barriers for retailers.

“Retailers will have to worry about customers who are no longer carrying a physical wallet,” said Norton. “Customers might avoid their location altogether if the retailer can’t accommodate their preferred way to transact business.”

There’s no question, the biggest news from Tuesday is Apple Pay. Not the Apple Watch, not the bigger phone—the company’s modest play to replace credit cards. Years from now, when Apple’s talking about the fiftieth iPhone or the twentieth Apple Watch, people will remember Tuesday’s keynote most because of Apple Pay. And while it may seem like the consumer benefitted the most from Apple’s new products, retailers, too, have an amazing opportunity to make Apple Pay work for them—a chance to completely transform long-held assumptions about commerce, and modernize decades-old payment paradigms to fit in with our technological future.