Over recent years, agile new players have entered the in-store payments space, bringing new innovations that offer merchants more competitive, advanced solutions.

For example, terminal providers are rolling out new checkout solutions that leave traditional hardware (and software) options in their slipstream. Payment service providers are delivering omni-channel internet-based solutions, giving access to cross-channel shopper data. And other tech companies are attempting to remove physical cards from the payment equation, enabling shoppers to tap their phones to an NFC-enabled terminal to make a purchase.

Apple bites into the in-store payments chain

However, with the launch of Apple Pay, the prospect of a rapidly evolving in-store payments ecosystem that has huge potential benefits for both merchants and shoppers is a near term reality. This is due to two key reasons.

The first is that Apple’s enormous global brand power backed up by a simple, intuitive payment flow with Apple Pay means it stands the greatest chance yet of making mobile payments in store a natural payment method for a critical mass of shoppers (and the fact it is partnering with both issuing banks and leading retailers at a rapid pace is a significant boost).

Second, the introduction of Apple Pay is a catalyst that will be able to improve the in-store shopper experience in new and exciting ways. Consider the following scenario– an in-store shopper payment flow in 2015:

1.      The shopper walks into a store. In addition to being followed by the watchful eyes of staff, their footsteps are tracked via iBeacon (a system that can trace and send messages to nearby iOS devices) through their journey.  

2.      At the payment terminal, which could be a fixed or mobile terminal or even an iPad, the shopper whips out their iPhone 6 to make their purchase, swiping their phone and validating the payment with their fingerprint. With a combination of loyalty card and Passbook, the shopper is able to redeem loyalty points for a discount.

3.      Once the shopper has left the store, their cross-channel transaction data is available in one back office system. 

4.      When the shopper returns to the store, the iBeacon detects their iPhone and sends a targeted offer based on previous purchases.

Merchant and shopper benefits

Each step of our 2015 scenario gives a corresponding benefit to retailers – and ultimately shoppers as well.

The iBeacon – an Apple product that will no doubt be joined by Android-focused technologies in the near future – gives retailers the information they need to deliver a personalized in-store experience, including targeted offers, optimizing the store layout, and improving customer experience. Mobile terminals (in some cases, iPads) allow merchants to duplicate the online environment in-store, and provide greater convenience to shoppers making the transaction. Apple Pay’s secure technology significantly reduces the risk of fraud and chargebacks when compared to credit cards – especially in the US where EMV is not widespread. And cross-channel shopper data gives the merchants the ability to have a 360-degree view of shopper activity across online and in-store.

Cherry-picking the best of new technologies

The jury is still out on whether Apple Pay will become a widespread payment method at the point-of-sale in Europe (since the existence of EMV and fragmented banking landscape make its adoption a less compelling prospect) and other parts of the world. But forward thinking retailers are already using iBeacons to communicate with shoppers, and iPads as payment terminals – notably in Victoria Beckham’s new store.

And the good news for merchants is that they are just at the beginning of a new era of being able to cherry-pick the best solutions for each part of the in-store shopper journey and payment chain to suit their particular business. Besides Apple, new technologies will continue to emerge, including mobile payment options, terminals, and software, and merchants and shoppers are both going to be winners.