Apple Pay broadens its midstate reach

Banks, credit unions continue to enroll in contactless mobile-payment technology, while mulling future platform expansion

The next wave of regional financial institutions participating in Apple Pay is starting to take shape.

Lower Allen Township-based Members 1st Federal Credit Union is eyeing early May to roll out Apple Inc.’s contactless mobile-payment technology for its credit and debit card users. Shippensburg-based Orrstown Bank expects to have its debit card users enrolled by the end of the year, as well as credit cards through a third-party provider.

Other institutions with a large midstate presence — PNC Financial Services Group Inc., FNB Corp. and M&T Bank, to name a few — are already part of the Apple Pay ecosystem.

The foray into this new payment option, which continues to add retail locations — more than 700,000 as of early March, according to Apple — is something customers with the latest smartphones are demanding, banking professionals said. And staying relevant is paramount, especially as the mobile-payment platform space expands on non-Apple devices.

“We didn’t jump on it immediately, but we recognize the growing segment of iPhone users that have upgraded that like this technology,” Bob Marquette, president and CEO of Members 1st, said of Apple Pay, which was announced in September and launched in October. “Rather than lose their business, if they like it, we have little choice but to deliver what they want.”

Members 1st has nearly 174,000 debit cards in circulation, as well as more than 95,000 credit cards.

Apple Pay allows customers to input credit cards onto their phones. To make a purchase, they swipe the phone at a point-of-sale terminal and a near-field communication system, or NFC, allows the devices to wirelessly exchange digital information. Card numbers are not stored on the phone to help guard against fraud. Instead, Apple Pay assigns a randomly generated number, or “token,” which is encrypted.

Tokenization also helps protect merchants from security breaches since they never get the customer’s real card information in their system.

Mass adoption


“You don’t want to be last (to market),” said Ben Wallace, Orrstown’s executive vice president of operations and technology, even if Apple Pay and other mobile-payment platforms are only going to account for a very small percentage of transactions.

Orrstown has fewer than 50,000 debit cards in circulation. Enrolling “several thousand” customers in Apple Pay would be a big win early, Wallace said.

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