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volume 8 • spring 2015
linked iPhone, including older models, giving an even larger crowd an incentive to try it (see page 72).
Apple Pay’s debut also galvan- ized competitors, prompting a fresh wave of development from its m-payments rivals (see sidebar at right). Now, partly because of Apple Pay’s gathering competi- tion, it’s hard to place bets on
the concept’s more distant future, according to James Wester, re- search director for global payments at IDC. “Integrating mobile into payments, banking and financial services is a long-term change in consumer behavior that’s coming at the same time as a host of other changes that encompass social media channels, the cloud and issues surrounding data,” he
points out.
What happens next will depend
on how well Apple Pay can sustain the brand magic that propelled more than a million transactions
in the first 72 hours post-launch. Not bad for a tech company whose payments intentions were cloaked in mystery only days earlier.
How exactly did it happen?
Why Apple Was Ripe
Apple Pay’s success largely was due to a combination of market timing, elegant design and savvy strategy in securing key partners, according to Teresa Epperson,
a partner with global strategy and management consulting firm A.T. Kearney. “Apple Pay’s
APPle PAy’S RivAlS
Other m-payments concepts that languished in various stages of devel- opment prior to Apple Pay’s arrival suddenly, it seems, are blossoming with new potential. These include:
Google Wallet
Initially launched in 2011, Google’s m-payments service is undergoing a
major overhaul this year with new technology and intellectual property gained from Softcard, another m-payments startup it acquired—and promptly ab- sorbed—in February 2015. The major mobile network carriers previously thwarted Google Wallet’s development by refusing to support it, but this year Google signed deals with AT&T, T-Mobile USA and Verizon to ensure Google Wallet comes pre-installed in new Android phones.
Samsung Pay
Korean phone manufacturer Samsung Electronics Co. is rolling out Samsung Pay this year in the U.S. and Korea in conjunction with the launch of the NFC-based Galaxy S6 phone, which comes with built-in support for the service. Visa and MasterCard support Samsung Pay, which harnesses tokeni- zation for m-payments security and a fingerprint sensor to authenticate users. Samsung in February bought LoopPay, an m-payments technology that skirts NFC so users can tap to pay with any magnetic-stripe payment card at most POS locations, whether or not they’re contactless-enabled.
MCX’s CurrentC
The retailer-led m-payments consortium of MCX is piloting its CurrentC mobile wallet in stores across the U.S., with an eye toward rolling out the service nationwide by the end of 2015. MCX has released few details, but executives say CurrentC will support NFC and barcodes for POS transactions and will provide an m-payments service rich with merchant rewards and incentives. Target Corp., Walmart, 7-Eleven, Darden Restaurants and Lowe’s are among MCX’s 70 merchant partners.
Microsoft Corp.
Microsoft in March demonstrated a new Tap to Pay m-payments service
it plans to roll out for POS use at an undisclosed date. The tech giant estab- lished a new company called Microsoft Payments Inc.; applied for money transmitter licenses in the 48 U.S. states that require them (Idaho and
New Jersey had granted licenses at press time) and registered with FinCEN as a money services business. Microsoft also said its Windows 10 operating system, due out this year, will support host card emulation as well as a biometrics authentication via a user’s face, iris or fingerprint.
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