You probably didn’t notice the big news late last year because no one really uses Apple Pay or Android Pay yet, but for subscription companies, there’s a major change happening: Apple Pay and Android Pay on the web.
Why is this a big deal? If you haven’t tried either of the mobile wallets, now is a good time. The customer experience is really slick. No credit card wonkiness. Better security. And seamless, automated card updating. In retail, the value prop is less because you are normally swiping a card and not typing the numbers. But think about the current online experience.
Obviously, the penetration of smartphones surpassed 80% so the smartphone is becoming a ubiquitous platform for payments and with Apple and Google enabling the usage of their respective Pay wallets for online purchases, this could revolutionize online payments, specifically for subscriptions because:
- Simpler credit card payment entry — Since you don’t need to enter a credit card number or expiration date or name on the card, that equals time savings and reduction in manual errors. Better customer experience!
- Lower risk of credit card fraud — Because a token is provided rather than a credit card number, the risk of fraud on the card is greatly reduced. Reduced risk of headaches!
- Seamless card updating for services — Because the wallet ties the payment method directly to the issuing bank, when your card is reissued due for any reason, the wallet knows about it nearly instantaneously. This smart feature decreases the number of instances of a declined credit card. Improved customer experience!
For many of the reasons outlined above, businesses should be very interested in this trend. Specifically, the increased renewal rates are a godsend to subscription businesses that are constantly fighting the credit card decline war caused by reissued cards.
Now clearly people aren’t buying a thousand dollar per month service on their smartphones, but with more and more hybrid tablet/laptop sales and larger smartphones as the primary device, people will definitely be subscribing to consumer services via their mobile devices. Therefore, the penetration of Apple and Android Pay is bound to grow dramatically in the coming years as a boon for consumers and businesses alike.