The Future is Apple Pay
02 Oct 2015
Despite the reluctance from the big four banks to share fee margins, Apple Pay is coming to our shores in due time and there is little they will be able to do to prevent it. The reason? Consumer demand.
In the US, Walmart launched ‘CurrentC’ (MCX (Merchant Customer Exchange) in partnership with RCB Bank. It has failed as a platform. Although there has been consistent focus on reducing fees and owning the payment system – they have missed the main element to any mobile success, the simplicity and ease of use for the consumer.
Of the 40,000 global customer reviews I have read on mobile payments, mcommerce and mobile applications in general; the top feedback on the best-rated apps consistently remains to be ‘easy to use’ or ‘simple’. A current review of CurrentC reads ‘CurrentC you’re black and white TV. Apple Pay is colour, you had your chance 20 years ago.’
Consumer sentiment in the App store demonstrates the most-loved payment systems save the consumer time and money. Generally, the top performing commerce applications achieve one of these two basic consumer needs.
Although Apple Pay is recognised as a time saver, the adoption of the payment system has differentiated between markets.
In the UK, most of the press and feedback has come from the transport industry. Take into consideration that the Oyster Card has been in existence for some time and has done a great job of fulfilling the need to save time. Therefore, meeting consumers’ needs with a new payment system that is better, is not a difficult sell.
In addition to addressing consumers’ basic needs, the introduction of Apple Pay will also disrupt the industry in several ways.
1. It will turn plastic into software
When physical things (CDs, DVDs, photographic film reels) are turned into software, it has a tremendous knock-on effect. Apple Pay could herald the start of big changes in payment; imagine how you might adjust your spending if you could choose from dozens of instantly available digital cards (rather than the one or two you already have) every time you went to pay.
2. It uses tokenisation
Apple Pay doesn’t store card numbers; it stores tokens that are associated with them which are useless if stolen. The payments industry has been fiddling with tokenisation for years, but Apple has focused its collective mind. A new era of digital payments security beckons.
3. It reduces online payments to a finger press
What Tim Cook should really have done a year ago is show the genuine nightmare of e-commerce (with its 16 digit card numbers, address fields, expiry dates etc) then show Apple Pay at work. One fingerprint scan: done.
Taken together, these three factors will blur the boundary between a payment made in a shop and one made online. After all, if you can pay Gap online with a fingerprint, why not do exactly the same thing in a Gap store? You’ll avoid the queues, and possibly get all kinds of loyalty extras, while Gap could reduce the number of intermediaries taking a fee.