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Why we should take our hats off to Apple

With last week’s news of the iPhone 6 and Apple Watch debuting with mobile wallet capabilities, there is no doubt that Apple has given the (mobile) payments industry a shot in the arm. But in what direction, and what are the implications?

At long last we have near field communication (NFC) built into the hardware - an addition long speculated, and often disappointed. For years there has been two camps regarding NFC, one predicting its demise and the other its rise as a key technology in mobile payments. Thanks to the recent wave of industry support for host card emulation (HCE), and now with Apple adding NFC, this settles the debate rather convincingly. That’s not to say that NFC will dominate everything, but it certainly goes a long way in addressing the chicken and egg problem and means that industry players will have a lot more reason to support NFC payments. Together with TouchID and the Secure Element, not to mention the integration with Apple Watch, the complimenting technologies look quite promising.

What is far more significant is the effort Apple have expended in partnering with key industry players. Their approach of making the value of the wallet greater to both participants and consumers, paves the way to ensure wide acceptance, greater relevance and thus broad adoption of their wallet. This is where other players have failed, despite the inclusion of compelling technology.

Their list of key banks, card associations and especially retailers is impressive. Not everyone can pull off such a level of agreements - although to be fair, Apple is perhaps one of the few companies who can. But was it simply up to good negotiating skills? Did Tim Cook strike a deal with everyone as he did with U2? No. Apple’s trump card was that they have decided to let the banks and the merchants own the big data. This has huge significance since in one statement they took a massive stab at some of their biggest competition, and at the same time opened the door to everyone else. They did not even talk about loyalty, rewards, coupons and the like. They didn’t need to. It will now come to them from willing participants who need not feel threatened.

We have to take our hats off to Apple, much criticised in the past regarding their cautious approach to mobile payments, who may actually have been wiser (and perhaps somewhat luckier) than we thought - it’s clear they have learned from the mistakes of others and have been able to take a more robust and innovative approach.


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