Apple Pay: Curse or Blessing for Online and Retail?

Apple Pay is available after a long wait in Germany. The legal requirements for e-commerce companies and retailers for the mobile payment system and how they can act as acceptance points are explained by CMS lawyer and payment system expert Marcel Hagemann in an interview with LEAD.

What online and retailers need to look out for

LEAD: Mr. Hagemann, Apple Pay has just been unlocked in Germany. Google Pay can be used in this country since June. How do you assess the opportunities and risks for German e-commerce companies and stationary retailers?

Hagemann: The risks of stationary retailers and e-commerce companies are low. In principle, they do not differ from the risks associated with the use of the classic giro or credit card payment. The repeatedly mentioned data protection concerns do not affect the dealer. Above all, this has the advantage that it can now offer another payment method.

LEAD: And what do online and retailers need to pay special attention to from the legal point of view when introducing them?


Hagemann: When introducing a mobile payment solution – such as Apple or Google Pay – online and retailers should work with established payment service providers. The dealers work with them anyway, so it’s all about unlocking another functionality. If anything, the payment terminal needs to be renewed. Because the hardware side, the terminal must be NFC-enabled, so enable contactless numbers.

LEAD: Offering Apple Pay as a payment option certainly does not work overnight. What steps does an online or retailer need to take and what needs to be legally considered?

Hagemann: Legally and technically, there is no need for a major change for online or retailers. If one disregards the conversion to a new payment terminal, only the cashiers have to be trained in stationary trading. The provider side is also prepared – they already operate their platforms successfully in numerous countries. It only needs to negotiate the contracts with the banks from this site, which is happening right now. We therefore do not expect any significant teething troubles or teething problems.

Also interesting: If privacy becomes a feature

LEAD: Are there any specifics for retailers to introduce Apple Pay compared to offering check or credit card payments?

Hagemann: The two systems are very similar. Basically, the virtual checking or credit card on the smartphone replaces the familiar physical card. The only difference is that the authentication does not work by PIN or signature, but via the smartphone. Typically, up to an amount of about 30 euros, it is enough to simply hold the smartphone or the smartwatch to the reader. Only with higher amounts the payment must be released via fingerprint, face recognition or the smartphone PIN. Accordingly, there is a certain risk of misuse of the smaller amounts, but only in exceptional cases will the consumer be harmed. Typically, these damages are completely replaced.

Will Apple Pay be a success?

LEAD: Will Apple Pay be a success in Germany? Will the payment service change German commerce?

Hagemann: Decisive for the success in this country is the acceptance of the customers, the cooperation with the banks and the willingness of the dealers to offer this payment alternative. In that regard, Germany is undoubtedly a special market, as the “German in itself” is more conservative in payment processing. In this country is still “Cash is King” and the credit card is much less common than in other countries. In the medium term, however, I have no doubt that payment via the smartphone will achieve a significant market share in cashless payment methods. This type of payment processing is simply more comfortable for consumers.

Marcel Hagemann is a lawyer and partner at the international law firm CMS in Germany. He looks after several major payment service providers both in terms of launching new products and acquiring other payment service providers.

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