App Marketing Conversations: The Impacts of Apple Pay

Welcome to the newest installment of App Marketing Conversations. In this episode our CEO, Ian Sefferman (@iseff), talks about Apple Pay and how it will impact apps and app marketing. He is joined by Ryan Morel (@ryanmorel) of Gamehouse (@ghpartners) and Robi Ganguly (@rganguly) of Apptentive (@apptentive).

Transcription

Ian: Hello, everybody. Welcome to another installment of App Marketing Conversations here with Ryan Morel of Gamehouse and Robi Ganguly of Apptentive. I’m Ian Sefferman of MobileDevHQ by Tune, brand new Apptentive space. I feel like we definitely need the banner behind us, though.

Ryan: Yeah, you’ve got to have something.

Robi: Yeah, that’s true. Maybe we should get an App Marketing Conversations banner.

Ryan: Oh, hey, you want to do that?

Ian: That means we need a logo and stuff.

Robi: More work.

Ryan: Too much work.

Ian: So, we’ve been talking about the Apple Keynote from last week. We discussed the phones in your segment. We discussed the watch in your segment. I think the other big piece is Apple Pay. It seems interesting. I think there have been a lot of questions that came about it. You had a good understanding of how it actually works. Do you want to give?

Ryan: I think you mean, “You had one of the better ones of the three of us, will you explain it?” Probably everybody watching this is going to have a better idea than I would. My explanation is, “You have your phone. You use Touch ID, you touch an NFC enabled thing, and that’s it.”

Ian: I think the interesting things that you noted that I didn’t know were, I was like, “Do the retailers actually have to have a point of sale device from Apple or does it work with something else?” Apparently it’s with all NFC touch payment stuff. I think that’s really interesting. The fingerprint thing that you mentioned I think is really interesting. What are your first reactions?

Robi: I think that of the things they announced last week, Apple Pay is probably going to have the most waves of impact for the future. The payment space is humongous. The Touch ID stuff, when it came out initially, was interesting, and now it feels like a secret weapon, because it’s taking your security, your identity, your wallet information and turning into something that you can do really quickly. It feels like Apple already has the most credit cards on file. Very quickly they will be come the biggest juggernaut in payments and commerce that we’ve seen.

Ryan: Yeah.

Ian: Yeah. I think that’s a super important point. I’m actually super surprised that Amazon never tried this with their Fire Phone. They have a huge amount of credit cards and are incredible at getting people to purchase things. I expected them to be able to take that on. That would have been interesting first future for them. What are your first reactions to it?

Ryan: I think I’m with Robi. I think I had two reactions. One was, it feels a little bit to me like Apple’s at a point of building services to maintain their iPhone market share and the money they make from those devices. I’m not saying that’s a bad strategy by any means, but that’s really what it felt like. “How are we going to keep the golden goose fed and make it fatter?” That’s one thing. The second thing is in total agreement with Robi. This feels like a really big thing, and it’s probably, I’ll just say back what you said. It’s going to be huge, I think. My own personal experience, I had ordered Coin. As soon as the Apple Pay thing came out, I was like, “Why do I want this Coin thing again?” It was like, “I want my money back, this is dumb.” They have some of their own issues that partially drove that, but just from a consumer perspective, I think it’s going to set a fire. For people in retail, and I actually think the bigger deal will be on the local web and finance department. That, I think, is the biggest, especially from an app marketer and app developer perspective. If you are trying to compete against Amazon, which you brought up, one of the things that is probably hard for you is closing people as they move through the order process. If you have the ability to say, “Just use Apple Pay,” your known and trusted source, I bet conversion rates and order forms go way up. That’s a pretty big deal, I think, for a lot of small businesses.

Ian: I think one thing that is entwined in what you just said is that any transaction that takes place on your phone, Apple has historically been like, “We want 30% of that.” That’s no longer the case with this. Does that actually open the door to a much wider breadth of businesses that will use their phone? That will use mobile as a place to transact and conduct business.

Ryan: That, I think, is really powerful.

Ian: The other thing that I thought was interesting during the Keynote. I think it was Schiller who said this. He basically took out his wallet, and he was like, “Anything that is currently in here, we, meaning Apple, want to own.” It was like, “That’s really interesting foreshadowing of what they plan to do.” And I’ve long been a believer that anything that’s in your pocket should probably be on your phone. There are people that are working on doors that can be opened. Think about Apple with Touch ID. That would be super, super interesting as well.

Ryan: Yeah.

Ian: So how can app marketers take advantage of this? Is there anything to be doing there?

Robi: Well, I think, like you guys both talked about, if you have purchase flows inside your apps that are painful and in particular if they’re powered by Stripe, because Stripe came out quite quickly thereafter and said, “Stripe’s going to be able to take Apple Pay and work nicely together.” So if you have purchase flows like that, I would run, not walk. I would run towards figuring out when you can use Apple Pay in some form or fashion. How you can imbed up and what that looks like, and start prototyping. Because I think you’re right. Conversion rates will go up.

Ian: Yeah.

Ryan: Yeah, I think that’s the big one. I also thing, apps and this could be a room for mobile [inaudible 00:06:29] as well, because everyone keeps throwing away mobile web a little bit, and a lot of people use it. But it’s probably still a relatively big deal for [inaudible 00:06:38].

Ian: The last thing that I think was interesting that was confirmed today by Apple was that the Apple Pay product, the NFC in particular, will only be available, to Apple Pay, which is a really interesting lock in. I don’t know if that’s useful or insightful, but I think that’s interesting.

Ryan: Yeah.

Robi: I think one thing, we talked about this a little bit in the new iPhone segment, that’s going out of this, is battery technology keeps more important. How long it lasts or not lasts. The bigger phones probably will have better battery life. With better battery life you can have better peace of mind that, “I can use this for things I go out and do and not have to carry my wallet necessarily for other [inaudible 00:07:32] cards, etc. So all that [inaudible 00:07:34].

Ian: Yeah. That’s totally true.

Ryan: I guess I don’t know enough about NFCs and protocol for transferring data. My question, from Apple’s perspective, if I were them I would be saying, “Do we really want to enable? Release NFC for the first time in one of our global devices and payments at the same time?” How secure is that? What does NFC enable people to do?

Ian: Again, I have about as much understanding as you do, but it’s NFC is simply “near field communication” and it’s like if two devices are close to each other they can talk in some way. And then there’s some standard built on top of that that allows you to do transactions. Then, you could theoretically use it for something else, like locks on doors. Theoretically some developer could come in with an app that uses Touch ID and NFC and, “Boom, the door’s open.” But that seems to be locked out.

Ryan: I think so. I was making a slightly nuanced view. I think the other important thing is low energy Bluetooth is much more available and accessible for developers on iOS than it is versus Android, just given the variations in operating systems. As far as I understand, a majority of the internet of things enabled for your house work off of [inaudible 00:08:55] Bluetooth. So that aspect of [inaudible 00:09:00].

Ian: All right. Let’s do one last question. Of the three topics we discussed, the watch, the iPhones, and Apple Pay, which are you most excited about?

Ryan: Well, I’m excited to get my phone on Friday. I’m excited to see a watch in practice. I think, as someone who owns a small number of Apple shares, I’m most excited about Apple Pay.

Robi: I would say definitely Apple Pay. I think it’s going to make a bunch of commerce wake up and realize they can get better. It will probably make a bunch of money in the process for us Apple shareholders.

Ian: I agree.

Ryan: Let me ask one more question.

Robi: One more thing.

Ryan: Does Apple Pay, is this one of the things that enable small to medium ecommerce providers to compete with Amazon? I know, for me, I immediately go to Amazon because they’ve got my stuff. If you can solve for the, “We could ship something fast,” which I think a lot of people could do, no just Amazon. Behind the [inaudible 00:10:22] search results, maybe that’s hard. The payment stuff, that’s really the most important piece, right? One of the most important. Are we getting to a point where start ups can reasonably compete with Amazon by picking and choosing all these different pieces that Amazon at one point just had a monopoly on?

Ian: I think that’s super interesting to think about. I’m not sure I totally agree that it could, but I think there’s obviously more chinks in Amazon’s armor.

Robi: Yeah, I think that if you’re inside Apple, you’re definitely thinking, “That’s part of our sales pitch. That’s how we’re getting everybody on board.” I think if you’re Amazon you’re looking at that and saying, “This is a direct attack on our convenience.” More and more these guys are butting heads on lots of things.

Ian: Which makes Amazon’s Fire even more important to them.

Ryan: And an even bigger disaster.

Ian: All right. Thank you guys. Be sure to like this video, subscribe, share, watch the others. All the things that you can do, please do. We’ll talk to you next week