A day after Apple Pay officially launched in Israel, there are hints that the long-promised digital payments revolution in Israel is about to begin.
“This is a holiday for iPhone users and a significant leap forward for the payments market in Israel,” said Ron Painero, CEO of the max credit card firm, following the launch on Wednesday. “Today we are completing a move to change the payment habits of Israelis.”
An estimated 400 million people around the world already use Apple pay, which comes installed on all Apple devices. Users of iPhones, Apple Watches, and other Apple devices can pay in most stores with just a few taps. Credit card machines at most businesses in Israel have been using the EMV standard, which enables contactless transactions by cellphones and smartwatches, since November.
To some Israelis, the “aliyah” of Apple Pay to the Jewish state, which has been available in the US and UK for nearly six years, represents a watershed experience for consumers.
“Apple has made the purchasing experience better, safer, easier, more secure,” said Raphael Freeman, a Modi’in resident and long-time Apple user. “The onboard experience is extremely easy, and takes about a minute to get started. Then, to pay at the store, I just double-press on my watch, and it’s done.”
Users just need to input their credit card details to the Apple Pay app to get started. All of the large Israeli credit card providers have agreed to work with Apple, and some of the smaller players, including the Postal Bank, Igud, and Yahav, are said to be finalizing their agreements with Apple.
It should be noted that Apple Pay users with accounts linked to overseas credit cards have been able to pay at Israeli stores with their Apple devices since the EMV devices were launched.
Purchases on Apple Pay are secure because it is verified with a biometric ID or user-selected password, along with a secure and dynamic one-time ID, the company says. Users can also use Apple Pay online on e-commerce sites displaying the Apple Pay payment button.
Credit card companies welcomed the launch with discounts and specials for customers. American Express said it would give customers 10% cash back and double points on purchases made using Apple Pay during the launch period. Max offered users a NIS 30 voucher for use at the Arcaffe chain upon making their first payment, in addition to discounts at other participating stores.
Android users have had digital wallet solutions available for several months now. In February, Bank Hapoalim launched its own digital wallet app, followed by Bank Leumi and others. Supermarket chain Rami Levy also recently launched its own digital wallet, designed to make shopping faster and easier throughout its stores and online sites.
However, the introduction of Apple Pay opens up digital wallet payments for the estimated 30% of the market using iPhones, and is expected to represent a tipping point in the technology’s adoption.
In the day since Apple Pay launched, retailers reported varying levels of usage – generally linked to certain demographics. At iDigital, the official distributor of Apple products in Israel, customers started paying with Apple Pay as soon as the store opened on Wednesday morning, said a spokesman for the chain.
In the Jerusalem neighborhood of Katamon, retailers were less familiar. Cashiers at the Anise health food store on Palmah said that two customers had paid with Apple Pay by Thursday afternoon, while the Duvshanit cafe next door, which generally serves an older clientele, hadn’t seen anyone with it yet. Other retailers were vaguely familiar with the technology, and some cashiers asked for help setting up payments on their phones.
Even the most grizzled business owners seemed at least curious about how Apple Pay would change consumer behaviors. “I heard about it in the news,” said the manager of one neighborhood ice cream store. “We’ll see if it makes a difference.”