Page 70 - Pay Magazine s2014

digital money
The Apple Pay Effect
announcement wasn’t the coro- nation of the mobile payments ‘winner,’ but rather the echoing bang of the starter gun kicking
off the mobile payments race,” she explains. “Lots of players had been milling about at the starting line, experimenting with pilots and various partnerships, but it really wasn’t until Apple got involved that the traditional players in the consumer payments and mobile ecosystems got into the game
in earnest.”
First, Apple cannily opted to go with NFC as its foundation at a time when the contactless pay- ments technology suddenly showed renewed potential for use by merchants switching out POS hardware to NFC-compatible models as the U.S. migration to EMV neared (see page 80).
Next, Apple leveraged its vaunted design prowess to ensure Apple Pay aligned with the elegant design its users have come to expect. Apple then wooed a cadre of influential merchants as launch partners. Key considerations for retailers Apple selected for the launch included the ability to provide solid POS support and training to avoid mishaps during the service’s crucial early days. Equally important was the need for retail launch partners to have a strong base of iPhone users
to deliver the expected higher transaction volumes when customers tried out Apple Pay, proving its convenience value (see sidebar at right).
The other vital element in building the Apple Pay ecosystem is Apple’s approach to the major banks, payments networks and other financial servicers. Financial institutions have been wary about potential costs, security risks and competition associated with new m-payments methods, but Apple
brought the credibility of a solid business model with its well- established iTunes Store, with hundreds of millions of consumer payment cards on file. Apple designed its m-payments service to neatly replicate payments providers’ existing roles with physical cards, giving banks a
SECurity PErCEPtionS: MobilE PAyMEntS VS. CrEDit CArDS
Do you think mobile payments are currently more or less secure than traditional credit cards?
50% 40% 30% 20% 10%
LESS SECURE
MORE SECURE
March September 2014 2014
December March 2014 2015
source: 451 Research, March 2015 survey of 4,168 consumers.
APPle PAy’S PARTneRS
The payments networks, merchant acquirers, banks and merchants vowing support for Apple Pay continue to be key to its success. Here’s a sampling:
• Visa, MasterCard, American Express, Discover and PayPal
• 2,500+ banks, including Bank of America, U.S. Bank, Citi, Capital One, Chase and Wells Fargo
• 700,000+ retailers, including Whole Foods Market, Walgreens, McDonald’s, Macy’s, Nike, SUBWAY, Chevron, Texaco and the Disney Store
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