Apple Watch, Pay will change retail

Apple (NASDAQ:AAPL) introduced new iPhones, a watch and, notably, the long-awaited mobile wallet that will tie together hardware, software and retail in an entirely new way.

The series of announcements are among some of the most important advances in mobile with big implications for retailers. Apple's iPhone 6 and 6 plus will likely be big sellers when it comes to hardware, but the watch and payment platform promise to transform the retail experience.

Apple Watch functions as a communication, health and fitness device, and works with the company's new payment system.

Apple Pay supports American Express, MasterCard and Visa cards issued by large banks including Bank of America, Capital One, Chase, Citi and Wells Fargo. Users can also link their iTunes payment information.

Big retailers are already onboard, including Bloomingdale's, Disney Store and Walt Disney World Resort, Duane Reade, Macy's, McDonald's, Sephora, Staples, Subway, Walgreens and Whole Foods Market. In all, 220,000 merchant locations will accept payments via Apple Pay.

Mobile shopping will be enabled by Apple's Touch ID, letting users approve payments with a fingerprint.

One welcome feature of Apple Pay is its security, which comes at a time when data breaches and fraud are at an all-time high.

"Security and privacy is at the core of Apple Pay. When you're using Apple Pay in a store, restaurant or other merchant, cashiers will no longer see your name, credit card number or security code, helping to reduce the potential for fraud," said Eddy Cue, Apple's senior VP of Internet software and services. "Apple doesn't collect your purchase history, so we don't know what you bought, where you bought it or how much you paid for it. And if your iPhone is lost or stolen, you can use Find My iPhone to quickly suspend payments from that device."

Security issues are key and the timing is right for this product. A year ago consumers yawned when asked about security or privacy concerns. Then Target had a massive data breach, followed by Neiman Marcus, Michaels, Sally Beauty and now Home Depot.

Checkout lanes at all Whole Foods Market stores already accept industry standard Near Field Communication (NFC) payments via pads at store checkout registers. And Target, perhaps the largest retailer to suffer a high-profile data breach, will begin accepting Apple Pay in October.

"We know mobile is becoming the front door to Target, and we're focused on creating the best possible mobile experiences for our guests," said Jason Goldberger, senior VP of and mobile. "We're thrilled to support Apple Pay to streamline how our guests pay in the Target app–this absolutely makes purchasing from Target's mobile app easier than ever."

And while easy and convenient is important, security may be Apple's new mobile product's biggest selling point.

*A version of this story originally appeared in FierceRetail's sister publication, FierceMobileRetail.

For more:
-See this Apple announcement
-See this Apple announcement
-See this Target blog post 

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