The launch of a new Apple product is always one that sets the media wires on fire and the recent iPhone 6 has been no exception. With new technology though comes new challenges to overcome. We had “Bendgate” most recently, for example (although it’s almost certain that this was a hoax) and of course the introduction of Apple Pay, which many online commentators believe could be the digital wallet that we’ve all been waiting for. Certainly it seems more promising than any solution that has appeared on the market thus far.
The idea was firstly to use ‘iBeacons’ to prompt a new secure payment arena for the consumer, but this was seen to be too complex for merchants to implement. Apple managed to overcome this though, with TouchID, NFC (Near Field Communication), and additional hardware on the handset that provides super-powerful encryption. Unfortunately, the encryption was cracked in the first week, however, but it certainly seems that this wallet has more to offer than previous versions that are already on the market. Indeed, as Apple doesn’t keep a record of card numbers, and the merchants also don’t see these, it seems like an ideal, and secure, solution for B2C payments.
Offering Improved Security
Security experts have welcomed the news though: “This is really a great way for Apple to push a much more secure payment authentication process out to the masses,” said Tom Pageler, chief information security officer at DocuSign.
“It appears that users will synchronize Apple Pay with their credit cards through their iTunes account, which is linked to their device. The data provided to the merchant won’t be card data, but some type of dynamic data that can only be used once.
“This will be a much safer transaction for consumers and merchants because the data is created for a one-time transaction-specific use case. The large data breaches we’ve heard about recently at Home Depot, Staples, and Target would not be able to occur again because transactions don’t produce reusable data.”
With this in mind then, is it likely that Apple Pay can cause enough disruption in B2C payments to prompt further innovation, perhaps even reaching the B2B payments sector?
B2B Payments Archaic
In this uber-connected modern world, businesses remain mired in the past when it comes to payment cycles. While there are of course solutions appearing on the market which show that the technology is in place for businesses to accept ePayments, not enough companies are choosing to do so.
However, according to Blue Hill Research, the emergence of Apple Pay and improved security is an encouraging one for business, especially because of the use of tokenization. The majority of business-related payments they say can be broken up into two main categories:
- Point of sale purchases
- Post-invoice payments
The researchers say that the majority of work that’s been carried out in the payments industry so far has been focused on the latter with regard to finding secure ways to send payment.
Think Mobile First
Currently, while many believe that the introduction of Apple Pay will be revolutionary in terms of mobile payments, it’s not likely to affect post-invoice payment processing very much at all. What’s more likely, or even necessary, is for a similar product to be offered to enterprise customers, especially those running BYOD (Bring Your Own Device) schemes.
The facilitator for this could be the partnership between Apple and IBM “to deliver on iOS device-based mobile apps and ecosystem deployments to enterprise clients. IBM’s own MobileFirst platform will be the key to delivering on these large scale mobile ecosystems,” according to Blue Hill Research.
This is all very well for larger companies of course, but not all businesses run a BYOD scheme, and not all that do use Apple and iOS. So it seems that there may be some disruption in the offing with regard to mobile wallets in B2B transactions for point of sale purchases.
The move to “real-time” data insights coupled with “real-time” mobile payments could theoretically ensure that businesses are able to better and more accurately predict cash flow. Recent industry data shows that some 78% of companies can’t predict cash flow with a high level of accuracy, so would be a big step in the right direction.
End-to-end Solutions for Business Transactions
What’s needed for B2B transactions are solutions that offer insight and action at every given point in supply chain financing. Dynamic payments that are carried out in real time and can have early settlement discounts applied are the way forward if businesses are to get with the times and use the technology offered to save money and streamline processes.
That’s not to say that mobile wallets don’t have a place in the enterprise. They do.
While it’s true that Apple Pay is in general being well-received and could prove to be a key disrupter for B2C transactions, it’s not a B2B solution at all currently. This means that businesses have to look to other technologies if they’re to make inroads with electronic payments. There are other solutions on the market already that can help this to come to fruition which offer dynamic payments, discounting and vitally, the security that modern business must demand in order to remain compliant.
These solutions offer the control over cash flow that enables predictability, as well as the opportunity to tighten spending with dynamic discounting. This allows for working capital to be optimized and for businesses to effectively control supply chain finance and all that goes hand in hand with it.