We’ve long said that mobile payments on its own is a solution in search of a problem. The marginal difference between tapping a phone and swiping a credit card isn’t enough to change such a deep-rooted habit. It needs something much bigger.
That could include saving time (skipping lines) or saving money (rewards programs). Both of these have been pushed forward by several items in the past few weeks that relate to local “order ahead” features. This was the vision first launched by Paypal in 2013, as well as Square’s recently killed order-ahead app.
Most recently, Starbucks this week announced that it’s expanding its order ahead trial to several states. Coffee is conducive to order-ahead, given its frequent and personalized repeat orders. Starbucks has also seeded this activity with healthy penetration of its mobile payment app.
Lower the Barriers
But for widespread mobile payments adoption, a “point solution” like Starbucks only goes so far. A platform provider like Google or Apple have to be at the center of anything more broadly applicable across retailers and product categories.
For example, we’ve predicted that Apple Pay’s killer app and short term opportunity will be in-app payments to summon local on-demand services like Uber. This has panned out over the past six months and acclimated lots of people to mobile payments.
Another interesting move came at Apple’s WWDC conference earlier this month. The company partnered with Square to launch an NFC reader for point-of-sale (POS) mobile payments for local merchants. This could do for NFC payments what Square first did to “democratize” credit card acceptance for small businesses.
But more interesting is what this could do for Apple and it’s continued moves to improve Apple Maps. Related to the Square integration, Apple will also now have more robust merchant pages with business details… including which ones now accept Apple Pay. The next step would be to let users order ahead.
In other words, Apple Pay and Square create a digital path to purchase that lays a foundation for advance ordering within Apple Maps. Square also recently killed its order-ahead app to focus on its core business, so it could be interested in Apple handling that functionality while it holds its ground at the POS.
It’s also worth noting that this speculative move would be in line with another important trend we’re seeing in local: operational support. In other words, as we’ve documented, the local opportunity is morphing from sales & marketing products for SMBs to operational tools that help them run their businesses.
Build or Buy?
Of course there are other moving parts to Apple pulling this off, such as menus, inventory and prices on Maps business profile pages. But this could be an interesting build or buy opportunity for Apple to get embedded deeper in local commerce. Apple Maps is meanwhile quickly growing its mobile mapping share.
Indeed, Apple has been very acquisitive over the last few years to repair Apple Maps and boost its standing in local search. For example, at WWDC we finally saw public transit information unveiled in Apple Maps — the direct result of its HopStop and Embark acquisitions.
This is purely speculation, but similar moves could boost local merchant profile information, including order-ahead product information. This would join Apple Pay, Square’s NFC reader, loyalty card integration and other factors that continue to paint the picture for Apple’s opportunity in local.
As further speculation, just for the fun of it, it’s also notable that Yelp could be up for sale. There are only a handful companies with potential synergies, not to mention cash reserves, to buy it. Apple has some logic as a suitor in light of the above, though it might be an expensive way to get local data. Just sayin…