So far, most of the merchants that have signed up to accept Apple Pay are large ones – Macy’s, McDonalds, Subway and Whole Foods. But small businesses also have to consider whether adopting the payment method will be worthwhile.
Smaller businesses have been better served by companies like Square or its UK equivalent iZettle, who provide a card reader to allow payments to be taken by the merchant on a smartphone or iPad. Now, there are many more of these services on the market, including offerings by PayPal and Amazon.
To use Apple Pay, businesses must have an NFC reader, which is also called a contactless reader and facilitates near field communications. Right now, less than 10 percent of American retailers do have this technology in-store, The New York Times reports, and purchasing it could set them back several hundred dollars.
But American retailers are already changing their payments structures as US starts to get rid of magnetic-strip cards in favour of EMV compliant models. From October 2015, the change will be so complete that the liability for credit card fraud will shift to the merchant if they are still using magnetic strip terminals.
NFC readers can accept both EMV standard credit cards and digital payments like Apple Pay.
“It’s like upgrading from an iPhone 4 to an iPhone 6; you’re upgrading and getting many new things with that,” Donald Boeding, president of merchant services for Vantiv, a payment-processing firm in Cincinnati, told The New York Times.
Pete Donat, senior vice president of the payment-processing firm First Data, said that integration should be less complicated for most small businesses.
“When businesses get larger and have more comprehensive solutions, then integration gets more complex,” he told NYT. “For small business, their point-of-sale provider will help them.”
Apple has some businesses completely convinced. “I think within three weeks, we’ll have it,” said David Kalt, chief executive of Chicago Music Exchange, a music store that sells instruments and music equipment and has about $20 million in sales.
Others are saving the decision to upgrade for a later date, opting to wait and see whether the payment method takes off.
Bret Csencsitz, managing partner at Gotham Bar and Grill in New York City, which has more than $10 million in annual revenue, allows customers to pay using MyCheck or PayPal’s mobile payment app. But fewer than 1 per cent do. Gotham may implement Apple Pay, he said, but not right now.
“No one is coming in asking for digital payment,” Mr. Csencsitz told NYT. “People have to first upgrade their phones and then get used to the idea of paying with it.”
Those who are holding back may be interested in another Apple Pay competitor – CurrentC from Merchant Customer Exchange. Spearheaded by Walmart, this payment method may appeal to smaller retailers because it does not need retailers to add new hardware.
It relies on QR codes — two dimensional bar codes — scanned in from a phone to process a payment.
The app is expected to roll out throughout the US next year. By then, many smaller retailers will have made the decision on whether Apple Pay is the payment method for their business.