Apple's Near Field Communication-based wallet was not universally welcomed by banks and merchants, but the in-app Apple Pay system is steadily gaining momentum as more retailers see it as a way to latch onto Apple's cachet without overhauling their point of sale.
Even Target, one of the major backers of the Merchant Customer Exchange (an Apple Pay rival), was quick to include Apple Pay for online payments. And Openbay, an auto repair marketplace, is the latest to hop on board in a sign of Apple's continued momentum.
"In-apps payments may be the bigger deal for Apple Pay," said Thad Peterson, senior analyst with Boston-based Aite Group. "Think about all of the apps in the Apple store potentially being enabled with Apple Pay, or iTunes, and then think about Openbay and others who have service organizations who want to go after this type of customer and it is a really, really big idea."
In-app payments are "incredibly easy" for a consumer to initiate and a merchant to accept, Peterson said.
Starbucks also recently added Apple Pay as a funding option for its popular mobile payment app, though it did not include the NFC payment option. And with Apple Pay set to be one of the Apple Watch's features at launch, this groundwork sets the stage for more Apple customers to use the technology.
When Apple Pay is an option online or in-app it also serves as a perfect testing ground for NFC payments, Peterson said. "A person making an Apple Pay purchase online or through an app may be more likely to also do it in-store. It just increases the utility of the payment vehicle."
Openbay is making Apple Pay available on its mobile app, allowing car-repair shop owners to accept Apple Pay payments without upgrading their point of sale terminals for NFC contactless payments.
"The mechanic's point of sale is no longer required" when using Openbay, said Openbay founder and CEO Rob Infantino. "Payment to the provider happens via the Openbay platform."
Openbay customers with iPhones can compare car repair prices, book appointments and charge repair costs to their Apple Pay accounts, and those transactions will appear through the auto repair shop's Openbay dashboard.
Prior to integrating Apple Pay, the Openbay app accepted only credit or debit cards, Infantino said. Payments through credit or debit cards on file with Openbay are processed through Stripe.
Openbay deducts a 10% fee, or 13% if a credit card is used, from the reimbursement for the total cost of the car-repair service.
In adding Apple Pay, the company is telling the automotive service providers that the mobile pay system will lower their risk of fraudulent charges because of its security measures and tokenization process.