Leaving your wallet and credit cards at home is getting easier as competition in mobile commerce intensifies. Apple, Twitter, Facebook and other companies are offering up more ways to make purchases that blur the lines between online and offline payments. Apple debuted its new phone-based payment system, Apple Pay, on Tuesday as part of its latest product announcements. CEO Tim Cook unveiled Apple Pay with two videos. In the first video, a woman fumbles with her wallet as she tries to make a purchase in a store and the store associate has to swipe the card multiple times to complete the transaction.
In the second clip, the same customer places her iPhone on an NFC terminal while resting her thumb on the phone's Touch ID reader. A Bank of America Visa card logo appears on-screen and the phone emits a small chirping sound signaling that the transaction is done.
Facebook and Twitter are also removing purchase barriers by adding "Buy" buttons to their respective platforms. Announced in July, Facebook is rolling out ads and page posts with buy buttons that let users buy products directly from a business without leaving Facebook. And this week, Twitter said it is experimenting with a button that will let users buy items from tweets.
So what does this mean for consumers? For cheapskates, the excuse, "I left my wallet at home," could become as antiquated as pay phones and impulse shopping will be much easier. Consumers are likely to see more flash sales and urgent messages that leverage the ease of buying items with one tap or click.
These features also point to the importance of a product's ease of use. "Your product needs to be user-friendly, if customers have to figure it out, you've already lost them," notes Paul Nadjarian, founder and CEO of the online automotive marketplace Mojo Motors, which aggregates and delivers information about car models that users are interested in.
Apple, for example, appears to have learned from other mobile wallets that failed to gain traction. Google Wallet has been around since 2011 but it never took off. Google Wallet's founding engineer blamed carriers, who offered their own mobile payment system, for the product's failure. Square Wallet offered similar mobile payment features, but was discontinued in May after failing to gain users.
Apple Pay has several things going for it: Apple already has partnerships with dozens of credit card companies and retailers like Subway and Macy's who accept Apple Pay; iTunes customers can transfer their existing payment information from their iTunes account to the payments system, and it has the hardware and leverage to discourage carriers from competing with it.