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Apple Expecting In-App Purchases to Make Up Most of Early Apple Pay Activity

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Ahead of the launch of Apple Pay tomorrow, The Wall Street Journal has posted an overview of the mobile payments service with some insight from Apple about what it expects from it over the coming months.

Apple's Senior Vice President of Internet Software and Services Eddy Cue stated that he expects the biggest share of early Apple Pay transactions to be made up by in-app purchases. With Apple Pay, users will be able to simply use the Touch ID fingerprint sensor on a device to complete a purchase for an item or service in an app. The Touch ID fingerprint sensor will also still continue to work for purchasing apps from the App Store.

Cue also spoke on how the company sees its roll-out of the service:
"We're trying to do something that I think is a game changer and it requires a lot of people to play together," said Eddy Cue , Apple's senior vice president in charge of Internet software and services, in an interview. "There's a lot to do here and we have a lot of work to do, but it should be huge."
While the company's mobile payments solution will also allow shoppers to physically buy items in-store using their iPhones, many of Apple's partners have yet to receive the payment terminals needed to process transactions. However, Apple expects many merchants to upgrade their terminals in the next year which will help the service. Apple Pay will not be compatible with corporate credit cards, prepaid cards, or even store cards like Macy's popular credit card offering. Macy's spokesman Jim Sluzewski stated that he expects Apple to add support for the Macy's card eventually.

The article also notes that Apple Pay on the iPad Air 2 and iPad mini 3 will only be compatible with in-app purchases and cannot be used to purchase items in-store. This is likely due to their lack of an near-field communication (NFC) antenna, which is what the iPhone 6 and iPhone 6 Plus use to interact with compatible payment terminals. The Apple Watch will have an NFC chip when it launches early next year and will allow users to make in-store Apple Pay transactions.

A report from Digiday also claims that Apple will integrate Apple Pay with its iAd business, citing sources familiar with the matter. The move would allow advertisers to embed a "tap-to-buy" button in their mobile ads, and would be similar to what Facebook and Twitter did for their services earlier this year. Apple is also said to be working in iAd's new retargeting feature with Apple Pay, which would allow retailers to push targeted ads with buy buttons to users. Apple is expected to integrate Apple Pay with iAd by the end of this year.

Apple Pay will be launching tomorrow, October 20 alongside iOS 8.1 and will be compatible with credit cards and debit cards from major payment networks including American Express, MasterCard, and Visa. Several banks including Wells Fargo, Bank of America, Capital One and more are also listed as partners.

In-store payments with Apple Pay will require the iPhone 6 or iPhone 6 Plus, and will also be supported by the Apple Watch when it launches in early 2015. All three aforementioned devices plus the iPhone 5s, iPad Air 2, and iPad mini 3 will be able to make online purchases with Apple Pay.

Article Link: Apple Expecting In-App Purchases to Make Up Most of Early Apple Pay Activity
 

ad1815

macrumors member
Oct 30, 2012
38
5
Children + touch ID + in-apply purchase = ? I hope Apple has considered this situation.
 
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ApplePhy

macrumors 6502
Nov 7, 2013
291
85
So no iPad Air 1 support?

Nope. No Touch ID (no NFC either).

That's why, despite having touch ID, the iphone 5S will only work for online ApplePay purchases such as described above, and not at POS terminals. No NFC
 
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SilianRail

macrumors 6502
Feb 24, 2011
352
56
Nope. No Touch ID (no NFC either).

That's why, despite having touch ID, the iphone 5S will only work for online ApplePay purchases such as described above, and not at POS terminals. No NFC
That's going to confuse the **** out of consumers. It would be better to just not let the 5S do anything.
 
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newagemac

macrumors 68020
Mar 31, 2010
2,091
23
Apple's Senior Vice President of Internet Software and Services Eddy Cue stated that he expects the biggest share of early Apple Pay transactions to be in-app purchases. Currently, in-app purchases require users to sign into their iTunes account and set up a new card if one isn't registered already. Apple Pay will allow users to simply use the Touch ID fingerprint sensor on a device to complete an in-app purchase.

I don't think that's the kind of in app purchases Eddy Cue was referring to. The kind Apple Pay is enabling has nothing to do with the App Store.
 
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WBRacing

macrumors 65816
Nov 19, 2012
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UK
So an integrated payment app is going to largely be used initially by apps that require payment for the integrated app store applications. I am shocked to my very core. :eek:
 
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z chamber

macrumors member
Sep 28, 2014
53
3
Nope. No Touch ID (no NFC either).

That's why, despite having touch ID, the iphone 5S will only work for online ApplePay purchases such as described above, and not at POS terminals. No NFC

Oh man. I can just imagine some idiot trying to pay for something at the counter with their iphone 5s. :D
 
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fermat-au

macrumors 6502
Dec 7, 2009
459
510
Australia
So far Apple Pay is US only, I wonder if, and when, Apple will expand outside the US.

The US is definitely the low hanging fruit of electronic payments, almost all of the rest of the world has had chip and pin and NFC cards for years now.
 
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darkslide29

macrumors 68000
Oct 5, 2011
1,727
604
San Francisco, California
That's going to confuse the **** out of consumers. It would be better to just not let the 5S do anything.

Well to add to your confusion (or help explain why the 5s is involved), you'll be able to use the 5S for in store purchases (thanks to Touch ID) with an apple watch.
The watch can't do it standalone. It needs the Touch ID authentication of a 5s, 6, or 6 plus.
Edit: can also be paired with a 5C and 5, according to the Apple website.

But on its own, the 5s can do apple pay website purchases thanks to Touch ID.
 
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HiRez

macrumors 603
Jan 6, 2004
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I don't really understand why in-app purchases are Apple Pay. I mean...haven't we already been using these the same way since Touch ID showed up? No NFC involved...I don't know, it's weird, seems like they are just trying to juice up numbers that count as Apple Pay for something that really isn't that.
 
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alohamade

macrumors regular
Sep 13, 2012
138
11
I don't think that's the kind of in app purchases Eddy Cue was referring to. The kind Apple Pay is enabling has nothing to do with the App Store.

I clarified the wording a little bit - this of course for stores/retailers that have apps and have actual items/services you can buy. Thanks for noticing!
 
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fermat-au

macrumors 6502
Dec 7, 2009
459
510
Australia
[Currently, in-app purchases require users to sign into their iTunes account and set up a new card if one isn't registered already. Apple Pay will allow users to simply use the Touch ID fingerprint sensor on a device to complete an in-app purchase.

I assume that Apple will still get their 30%?

Will Apple take a cut from physical in-app purchase? eg, an app that allow the user to select and buy clothes that are then paid for using Apple Pay.
 
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darkslide29

macrumors 68000
Oct 5, 2011
1,727
604
San Francisco, California
I don't really understand why in-app purchases are Apple Pay. I mean...haven't we already been using these the same way since Touch ID showed up? No NFC involved...I don't know, it's weird, seems like they are just trying to juice up numbers that count as Apple Pay for something that really isn't that.

Oh you know Apple can't wait til the next keynote to give their opening overview to talk about how many times/how much money has been charged with Apple Pay. And no matter the number, say the reception has been absolutely incredible and that customers love it. :cool:
 
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SilianRail

macrumors 6502
Feb 24, 2011
352
56
I don't really understand why in-app purchases are Apple Pay. I mean...haven't we already been using these the same way since Touch ID showed up? No NFC involved...I don't know, it's weird, seems like they are just trying to juice up numbers that count as Apple Pay for something that really isn't that.
Trying to end the murderous task of filling out the billing address on a mobile device.
 
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BvizioN

macrumors 603
Mar 16, 2012
5,192
3,254
Manchester, UK
The article also notes that Apple Pay on the iPad Air 2 and iPad mini 3 will only be compatible with in-app purchases and cannot be used to purchase items in-store.

That's a shame and it makes absolutely no sense to not be able to pay with my iPad air in stores :rolleyes:

Surely I was expecting someone to have the sarcasm detector broken :)
 
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frosty001

macrumors regular
May 14, 2011
101
4
Will Apple Pay work outside of the U.S. for in-app or online purchases? I know it's U.S only for store purchases.
 
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iGeek2014

macrumors 68020
Jun 29, 2014
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=== Nowheresville ===
Will Apple Pay work outside of the U.S. for in-app or online purchases? I know it's U.S only for store purchases.

Seeing as apple.com is the only website with a sub-section listed "Apple Pay" under the iPhone 6 microsite I'm guessing for those of us outside of the US means we'll have to wait until Apple Pay is rolled out in-store before we can use it for online transactions.
 
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darkslide29

macrumors 68000
Oct 5, 2011
1,727
604
San Francisco, California
That's a shame and it makes absolutely no sense to not be able to pay with my iPad air in stores :rolleyes:

Of course it makes sense. Your iPad Air doesn't have an NFC a chip. It Is physically not capable of this. The NFC chip was introduced in an Apple product starting with the iphone 6.

As for the iPad Air 2 being introduced after iphone 6, maybe apple should have included an NFC chip in it. It wouldn't have been expensive to add it. we would just just a little silly using it. But convenient to those who want safer in store transactions and can't upgrade their phone yet.
 
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Cougarcat

macrumors 604
Sep 19, 2003
7,766
2,552
I assume that Apple will still get their 30%?

Will Apple take a cut from physical in-app purchase? eg, an app that allow the user to select and buy clothes that are then paid for using Apple Pay.

The 30% is for software in-app purchases. That's iTunes, separate from Apple Pay. Apple negotiated rates with the banks, apparently it's .15% per transaction.
 
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