As a company focused on the transformative effect that mobile and apps can have on the world around us, it’s fair to say that Mubaloo gets excited over new innovations. Mobile payments have long been an area that we have watched with interest. We’ve seen some great ideas, such as Google Wallet, PayPal Beacon, Zapp and a myriad of other payment methods come to market. Many of them hold a huge amount of promise, but there is always one thing that holds them back – adoption.
Apple Pay is without doubt one of the most promising concepts to come out in this area, but it is not without its challenges.
Apple has waited a long time to get into the physical payments world, and an equally long time to bring NFC to its devices. Before the Apple Pay announcement many, Mubaloo included, wondered if Apple was planning on bypassing introducing NFC altogether, in favour of BLE Beacons and payments via iBeacon (like PayPal.)
One likely reason for Apple’s delay in getting into payments is exactly the same reason it waits to enter other markets. It waits until more of the infrastructure and technology is there to support it. Apple is rarely a first mover into any area, it waits until it can be the one to get it right.
With NFC, had Apple entered years ago, it would have had to invest significant time to push the adoption of NFC terminals. In the UK alone, there are over 300,000 NFC-enabled terminals at retailers and food and beverage outlets. NFC is also in use across London’s transport network and is being found increasingly in more places across the country. The same story can be seen in other countries where NFC terminals are springing up left, right and centre.
Banks have been pushing this by providing customers with contactless cards. With Apple Pay, customers will be able to authorise higher payments than £20, making it a viable alternative to the current chip and pin method – one that could save further time.
One thing Apple does have, however, is the trojan horse of the iPads and iPhones that get used by businesses as point of sale terminals. If Apple opened up an API for businesses to process payments directly via iOS device to iOS device, it could completely change both the way businesses take payments, but also the way they process them.
Apple has good reason to do this too. Whilst Apple’s physical stores are among the best in the world, it must be a little embarrassing that its employees are walking around with iPhone 4’s and 4S’s strapped into bulky payment terminals. The devices themselves are running a pre-iOS 7 operating system, taking customers on a bit of a history lesson every time they enter their details. If Apple could start to replace these with newer devices, that make the payment process with a staff member even more seamless, it would bring its retail operation up to date. Added to this, Apple doesn’t have physical tills in its stores, so it would need some way for employees to process payments from their iPhone 6 (and onwards.)
Whether Apple does this or not remains to be seen – but it’s good food for thought.
As to Apple Pay itself, Apple may have sold 10 million of its latest iPhone’s on its pre-order weekend, but it still needs banks and retailers around the world to get on board with Apple Pay. It is due to come to the UK at some point early next year, but then so too was iTunes Radio, nine months ago.
One thing that we can be certain of with Apple Pay is that it won’t be blocked by networks, in the same way that Google Wallet was. Apple has always made sure it can circumnavigate network control, as much as possible. It has one key advantage over Google’s entry here – complete control of software and hardware.
Such is Apple’s control, that it has also cracked how to allow for Apple Watch to authorise payments. By being linked to a master device (or iPhone in this case), Apple Watch will be able to authorise payments, so long as contact with the owners skin isn’t broken.
Apple Pay has the user experience and the deals with the payment providers to make it a success. By the end of the year, there should be 60 million iOS devices capable of making payments. What it needs is retailers, banks and consumers to embrace it to make it a success. Apple has the potential to use its devices as trojan horses to get Apple Pay terminals into more venues, whether it does so is a matter that remains to be seen.
“As someone who has long wanted my phone to replace my bulky wallet, I can’t wait to use Apple Pay” said PR Manager, Robert Haslam, “I hate having loose change in my pocket and have left my wallet at home more times than I care to remember. My phone is always with me so making payments from it just makes life easier!”