As a business owner, many of your strategic initiatives are about making it as easy and enticing as possible for customers to complete purchases. Even if you create exceptional products and services and develop deep brand loyalty, you risk losing customers if they find the checkout process to be less than convenient.

Apple Pay, the most widely used digital wallet payment method, can help meet the demand for a smooth checkout experience. By September 2020, there were more than 500 million Apple Pay users worldwide and in 2021 there were over 43 million Apple Pay users in the US alone. As Apple Pay rapidly becomes a preferred payment method for many consumers, businesses are mobilising to accept it. Here’s everything that you need to know to set up Apple Pay.

What's in this article?

• What is Apple Pay?
  
• How does Apple Pay work?
  
• Is Apple Pay secure?
  
• How many businesses use Apple Pay?
  
• What are the business benefits of accepting Apple Pay?
  
• How to accept Apple Pay as a business
  
• How much does Apple Pay cost per transaction?
  

What is Apple Pay?

Apple Pay is Apple’s digital wallet product. It’s compatible with Apple devices, such as iPhones, iPads and the Apple Watch. Apple Pay allows users to digitally store credit and debit cards and process card payments. Users simply take pictures of their credit and debit cards and Apple Pay stores the information.

Apple Pay also stores delivery and contact information, making it easier for businesses to dispatch physical goods, set up subscriptions, and send receipts and delivery tracking details.

How does Apple Pay work?

From the customer perspective, Apple Pay transactions can take place in person or online:

In person

For in-person purchases, Apple Pay users click to engage the Apple Pay function on their iPhone, iPad or Apple Watch and then hold it near a payment reader that’s equipped to accept Apple Pay payments. This contactless payment doesn’t require a Wi-Fi connection. Apple Pay, like most other digital wallets, uses near-field communication (NFC) technology, which enables two devices in close proximity to wirelessly communicate with each other and complete a transaction.

Online

When customers shop online with a business that accepts Apple Pay, they click a "Buy with Apple Pay" button on the web page and confirm the payment method on their Apple device.

Is Apple Pay secure?

Apple Pay and other digital wallets are generally considered to be secure payment methods. Because digital wallets use NFC, the risk of fraud is significantly reduced compared to other mechanisms of credit, debit or prepaid card payment methods, such as swiping a magnetic stripe or inserting an EMV chip.

Apple Pay securely processes transactions using a process called "tokenisation", where credit card numbers are replaced by an algorithmically generated number, or "token". Apple Pay then transfers this token to the receiving payment processor via NFC.

For both in-person and online transactions, users are required to authenticate the transaction on their device using fingerprint identification, face recognition or their device’s security PIN.

How many businesses use Apple Pay?

Apple Pay is one of the fastest-growing payment methods in the world, with over half a billion global users. Businesses are working to meet the growing consumer interest in using Apple Pay: Over 85% of retailers in the US accept Apple Pay, a figure that is expected to grow significantly over the next few years.

What are the business benefits of accepting Apple Pay?

The widespread adoption of Apple Pay around the world is a reflection of businesses’ essential need to accept popular payment methods as dictated by their key markets. There are substantial benefits to staying on top of the payment method trends in whatever global markets you do business. For example, 54% of online transactions in China involve wallets such as Alipay or WeChat Pay and 20% are with the local card network China UnionPay. If your business operates in China and you don’t accept these payment methods, you’re missing an enormous opportunity to capture as much of that market as possible.

Here are a few of the meaningful benefits of accepting Apple Pay if your business operates domestically in the US or other global markets where Apple Pay is a preferred payment method:

It’s faster.

In markets with high card penetration, such as the US and the UK, accepting digital wallets is a way to meet consumer expectations around fast transactions. Apple Pay transactions are faster than using physical credit and debit cards because contactless payments are processed more quickly than magnetic stripe and chip card payments. Quicker transactions can increase customer satisfaction and, from the business owner’s perspective, increase efficiency with shorter waiting times and faster customer turnover.

It’s more secure.

Digital wallets are safe, protected payment methods for both customers and businesses. Tokens keep credit card information secure and protected from breaches and fraud. Apple Pay also reduces fraud risk by requiring user authentication before approving each transaction and confirming the validity of the credit and debit cards on file.

It’s frictionless.

The moment of purchase is a critical point in the customer journey. If a customer encounters any barriers or friction during checkout, they might drop off and not complete the transaction. In fact, up to 81% of shoppers abandon their basket if their preferred payment option isn’t available. Abandoned baskets are the scourge of any business owner and a flawlessly engineered checkout process is a powerful way to prevent this issue. Given how many consumers prefer to use Apple Pay, making it available as a payment option could help reduce customer drop-off at checkout.

It promotes higher conversion rates.

Apple Pay’s "click and go" payment mechanism removes friction from the checkout process, elevating the customer experience and increasing conversion rates. Indiegogo saw conversions increase by up to 250% when customers used Apple Pay to fund campaigns. Instacart customers completed checkout 58% faster with Apple Pay than with other payment methods. Since Stripe started supporting Apple Pay, apps that accept Stripe have seen checkout conversion rates increase by up to 250%.

Customers love it.

Consumers are embracing Apple Pay, and 85% of businesses already accept it. Fifteen per cent of digital wallet users report regularly leaving their physical wallets at home, with an additional 11% considering doing so when they know they’ll be able to use a digital wallet to make a purchase. And for online and in-app transactions, the ease of Apple Pay is just as appealing. Businesses can’t afford to overlook this trend if they want to remain competitive.

How to accept Apple Pay as a business

In most cases, it’s easy to get your business set up to accept Apple Pay. Whether you do most of your business online, in person or a mix of both, it’s likely that you already have most of what you need.

In person

To accept Apple Pay payments in person, you’ll need an NFC-capable payment terminal and POS (point-of-sale) software that supports this payment option. Most newer card readers are NFC-enabled; if yours isn’t, it’s worth upgrading to newer hardware.

Online

If you’re accepting payments on your website, you probably already have a payment gateway and payment provider. Most payment providers are equipped to accept Apple Pay transactions. Businesses with online payments supported by Stripe can set up an Apple Pay integration in just a few quick steps.

On mobile apps

Accepting Apple Pay payments through your mobile app typically just requires adding a few lines of code if Stripe is your payment provider. For teams with developer resources, this is an easy task. And for businesses without access to developers, don’t let the code be an obstacle – it’s easier to implement yourself than you might think. Here are step-by-step integration instructions for iOS and Android.

How much does Apple Pay cost per transaction?

Apple itself doesn’t charge businesses to accept Apple Pay, nor does it charge users. Apple makes money from Apple Pay by charging card issuers 0.15% on each Apple Pay purchase. Although Apple doesn’t charge merchants to accept Apple Pay, some payment providers charge businesses a processing fee for each Apple Pay transaction. These fees vary depending on which payment provider you use.

Stripe customers don’t pay any additional fees to process Apple Pay and the pricing per transaction is the same as for other card transactions. For more information about accepting Apple Pay as a Stripe business, including how it fits into a comprehensive strategy to engineer frictionless checkout experiences and accept payment methods from around the world, learn more here.