Apple Pay looks for new users with holiday deals from Lululemon, others
Apple is promoting the expansion of Apple Pay through holiday partnerships with some major brands, including Lululemon and the New York Times.
The partnerships offer exclusive deals among those key brands for all Apple Pay users who make a payment through Safari. While these deals may provide an incentive for some users to begin using Apple Pay online, its exclusivity to Safari only may limit its appeal.
“Key brands have been, and will continue to be, pivotal for mobile/online payments to both launch and drive consistent usage,” Mr. Squire said. “Retailers who have a strong online and physical presence are particularly relevant around the holidays, with CPG’s (like Coke) playing a big role in the day to day purchase behavior of the mobile inclined.”
“Any time you introduce that level of a closed loop in payments you need to align strong incentive.”
Apple’s payments platform shook up the industry when it first debuted a few years ago, but so far it has yet to truly revolutionize payments as the company might have hoped.
Adoption rates are okay, but Apple Pay still has a long way to go to compete with other more established platforms such as Paypal.
Apple is hoping to entice a whole new set of customers through exclusive deals with popular brands including Lululemon, Adidas and the New York Times.
These deals range from free shipping from Adidas and 1-800 Flowers to coupons and rebates from other big brands such as Casper and the New York Times.
The partnerships also include on-demand services such as Instacart, Grubhub and Seamless.
While this approach may seem appealing, it comes with a number of caveats. For one, it is limited exclusively to users on Safari, Apple’s first-party Web browser.
Safari, while one of the most popular browsers in use, thanks to it coming pre-installed on all Apple devices, is ranked third overall. Google Chrome and Internet Explorer still far outweigh it in popularity, meaning large swaths of the population will be unable or unwilling to take advantage of these deals.
“Tying brand promos to specific web purchases via Apple Pay is a fairly typical approach to get first time users into the fold, leveraging the strength of brands that overlap with the Apple fans,” said Jon Squire, founder and CEO of CardFree. “Given that, as of now, Apple Pay online is inherently wedded to Safari, a Mac and either an Apple Watch or iPhone to authenticate, there is considerable friction and an obvious limitation to an Apple product trifecta for this transaction to be “seamless”.
Apple Pay is still quite popular however and Apple’s efforts to promote the platform will not be in vain. Expanding to online payments outside of mobile devices gives them a much broader range of customers to tap into.
Apple will have to make its payment platform more appealing to a broader number of people if it wants to catch up to other platforms with larger reaches.
“Apple has more relevancy than some of their ‘Pays’ competition for online transactions given their foothold with iTunes and their own web store,” Mr. Squire said. “Expanding from mobile-only makes sense, but there will need to expansion beyond just their product line for this to be a threat to the likes of Paypal or Amazon.”