Enough has been written about how cool Apple Pay is. And it really is a game changer in a world filled with card data breaches and fraud. Apple Pay's support of tokens and biometrics are extremely important features for consumer and payment security. However,
I want to point out some key trends in consumer and merchant expectations where Apple Pay may fall short.
In the old days when cash and checks were the only norm, consumers took payment options that were given to them. In today's mobile and social world, that is not the case. Consumers are used to paying online, researching products on mobile, and banking through
mobile devices. They know that they could leverage their mobile devices for paying not only merchants but also friends, billers, and others. Many would like to receive offers and coupons in their mobile devices.
Also mobile Internet has become ubiquitous globally. There are coverage issues in rural and developing markets but Wifi and other options provide missing coverage where it is essential (e.g. inside a retail store). Broadband is everywhere in developed countries
with developing countries catching up. Falling prices are promoting smartphone adoption globally but feature phones are long from being gone completely.
Given these facts (if not facts, at least widely accepted premises), following are my problems with Apple Pay:
- I trust my bank. I trust Apple as well but I don't trust my mobile device to the same extent. I could lose it easily. Storing my tokens with my bank in a cloud vault feels much safer for me.
- It provides a completely different user experience when I pay online vs when I pay at the POS. I would very much like a uniform user experience no matter where I pay.
- It uses NFC which completely ignores the fact that mobile broadband is ubiquitous in developed countries (at least).
- It does nothing to reduce POS costs for merchants.
- At least as of now, Apple Pay does not help me receive all the offers I want while walking the aisles at the retail store. (instore Wifi or BLE networks would let me do that) Also merchants and manufacturers would love a solution that allows them to influence
my product choices while I am walking the aisles.
- I can't pay my friends with Apple Pay. I need totally different P2P apps for that. Even worse, I need to know the intricacies in cost/ delays and choose the right app; not as simple as specifying speed/ cost criteria and getting goods shipped through a
courier.
Retailers want an integrated instore coupon distribution and payment network, not one for each purpose. Consumers want payment security and convenience. But they don't want it across multiple apps, devices, and networks where they need to know the intricacies.
Can Apple Pay match those needs?