Very short blog
Today ApplePay is limited to in-App purchase and at the POS (using NFC). Per my blog last week, mCommerce is one of the fastest growing trends in the industry right now. Apple will be extending the “touch ID” payment experience to all Safari browsers (with merchant support). Contrary to the poor POS/NFC uptake.. this will be a MASSIVE SUCCESS!!
- Merchant implements new ApplePay API that looks for supporting browser/device. Similar to what Google Checkout, Stripe, Braintree have done for accepting a token in lieu of card and cardholder data
- There is likely some other device/browser information going to merchant (like applePay plug-in on browser)
- Consumer has at least one touch ID compliant device (iphone 5s or 6)
UC 1 – ApplePay on MacBook – Easiest one to explain
- Consumer Checks Out
- Merchant checkout page finds supporting device/plug-in and displays “pay with Applepay”
- Consumer selects pay with Apple Pay
- Consumer’s iPhone 6 comes up with tough ID prompt (touch ID to complete purchase with Merchant X). Side note somehow Apple Keychain management is involved in exchange between devices
- Merchant receives token(s) for user ID and for card. User ID token is resolved through Apple service, Card Token is routed through TSP in current iPhone 6 AP model.
- new CNP rate tier for “tokenized” eCommerce (see my blog above from last week)
- fraud liability shift
Significantly it was announced that EMVCo just took over the next version of the 3DS spec. Remember when this happened for tokens?
- Paypal’s US take rate is around 340 bps, Apple will enable merchants to accept payments at a new rate tier and shift liability unto banks for 140-160.. wow..
- I believe Google is also in good shape to capitalize here, as is Visa Checkout. Perhaps Visa Checkout morphs into ApplePay online from a CYBS perspective. (CYBS becomes AP acquirer)
My confidence in this prediction 95%.