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What Is In Store For The Partnership Between Apple Inc. And J C Penney Company Inc.?

Neha Gupta

Beleaguered retail chain J C Penney Company Inc. (NYSE:JCP) has moved to enhance customer shopping experience in its store by unveiling Apple Pay support. The addition marks the first major collaboration between the retail giant and Apple Inc. as it continues to explore ways of attracting shoppers to its outlets.


JCP turns to customer experience

JCPenney has seen its prospects in the retail business turn sour in recent years as a wave of same store sales declines continues to take a toll on its operations. Same store sales in the recent quarter came in at $2.96 billion representing a 1.3% year over year decline. A decline in sales led to a net loss of $62 million up from $56 million reported last year.

The company has already closed down more than 100 underperforming stores as it continues to explore ways of freeing up cash and focus investments on stronger locations. Macy’s Inc. (NYSE:M) has also closed a number of stores underscoring how a good number of retailers are struggling to attract shoppers to brick and mortar stores.

The embattled retailer has now set its eyes on enhancing customer experience as one of the ways of to attracting more customers into its brick and mortar stores. Adding support for Apple Pay is one of the plays the company is banking on, to help improve shopping experiences in its stores thus accelerate sales growth.

The Apple mobile payment system is now available in all of the retailer’s stores across the U.S. The fact that a good number of people have iOS devices means the company stands good chance of attracting shoppers who don’t like walking around with cash.


Integrating with Apple Pay

In what can be interpreted as a push to attract more customers on iOS devices, Jenney says it is working on making its credit card available on Apple Pay. The integration will allow people using the app to accrue shopping points through a Rewards loyalty program.

“Customers simply add their JCPenney credit card as a payment option to Apple Pay using the Wallet or Apple Watch app on their iPhone. Plus, coming soon, customers with the JCPenney app on iPhone and iPad will have the option to complete their purchases using Apple Pay,” JCPenney in a statement.

JCPenney will now accept mobile payments from all the latest iPhones in addition to Apple Watch. Penney customers will be able to pay for goods by simply holding their phones or watches near the sale of terminal instead of having to use credit cards

The Integration will allow JCPenney to offer faster and seamless checkout processes in stores. The addition of the company’s credit card should also give customers another reason to shop at the brick and mortar stores given loyalty rewards on offer.

“And with the added convenience of our credit card as a payment option via Apple Pay, we’re giving customers another compelling reason to join our credit card and loyalty programs,” JCPenney in a statement.

JCPenney is also hoping that Apple Pay integration will not only encourage people to sign up for its Penney Credit card and Reward program but also helped fuel growth in its e-commerce business. The company is also hoping to use Apple Pay to attract a younger customer base.


Apple Pay Evolution

For Apple, the integration marks yet another important milestone in the push to make Apple Pay the epitome of mobile payments in the retail sector. JCPenney joins a long list of retailers that have added support for Apple Pay including Kohl’s Corporation , Best Buy Co Inc. and Traders Joe.

After a slow start, it appears Apple has found a way of ensuring, more banks and retailers add support for its mobile payment system. The addition of 13 banks and credit unions in the recent past should go a long way in filling coverage gaps across the noted states.

The Apple Pay platform currently supports hundreds of banks and credit unions across the US. The addition of Bank of America Corp and JPMorgan Chase & Co. has helped propel the payment system top of the charts, and is currently rated as the fifth most popular payment platform.


Mobile Wallets’ Growing Popularity

Source: Shutterstock

JCPenney adding support for Apple Pay is an indication that mobile wallets are slowly gaining traction. Analytics firm The Research reports that 17% of U.S consumers regularly use mobile payment service to pay for goods and serves up from 6% as of 2014.

“Mobile wallets really started to grow in popularity after the launch of Apple Pay almost three years ago. What we are seeing is a tipping point regarding adoption, which can be attributed to consumers worldwide now almost exclusively using payment-enabled devices, as older models have cycled out, with a few exceptions,” said Lu Zurawski, practice lead, retail banking and consumer payments, ACI.


Apple Expansion Plan

The fact that it took JCPenney three years to start accepting Apple Pay payments is an indication that Apple still has a long way to go, in making the system ideal for all retail outlets in the U.S. However, the tech giant has already set its sights on the international scene as it seeks to concur the world on mobile payments.

Reports indicate that the tech giant plans to enhance its payments in Europe as it looks to take the likes of PayPal and Venmo head on. According to people with knowledge of the matter Apple Pay, functions could soon be available in iMessage in Europe. A trademark registration with European patent Office Pertaining to Apple Pay Cash is already fuelling speculation of Apple Pay Cash.

Regulatory filings indicate that people may need a photo ID to use the new Apple Pay Cash tool. Details about the new service should become clear on September 12 when Apple holds its annual conference where it launches new products

A software upgrade for supporting peer 2 peer money transfer could be in the offing at the upcoming event to be held at the Steve Jobs Theater in Apple’s new Campus. The new feature if unveiled will allow users to send money it friends and family via iMessage.

(By Neha Gupta)

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