Apple Pay Aims to Be Your Whole Mobile Wallet

September 19, 2014
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Perhaps even more interesting than Apple’s new iPhone 6, 6+ and iWatch announcements on Tuesday September 9, 2014, is something that promises to be a little more revolutionary in practice than yet more gadgets: their new notion of a mobile wallet. Apple Pay is a means by which you can purchase retail goods with the wave of a smartphone, or a push on a button.

This is, in and of itself, nothing new. But by getting ‘special’ with Target, McDonald’s, Macey’s, Whole Foods and various other retailers – plus the big three of credit cards, Visa, Master Card and American Express on board – you’ll be able to buy a Big Mac or a broom with the tap of the new Apple iPhones or iWatch. Additionally, in the equivalent of the express lane on a highway, goods can be advance-ordered for pick-up or delivery.

Apple Pay Aims to Be Your Whole Mobile Wallet

Apple Pay will soon become an instantaneous rival of Paypal for a share of the mobile payment market which experts at Forrester Research calculate will bring in profits of over $100 billion in just the next five years, according to the New York Times. Even more interesting is the fact that the big American banking concerns which have, thus far, allowed the likes of Paypal a wide birth, are starting to get more hungry for a taste of the vast amount of tax-free profits earned by eBay. There are still old school fuddy-duddies out there who are dubious as to whether the general public will be okay with making payments through a digital device, but such luddite types are surely a minority.

The advantage of Apple Pay’s system comes, they say, in that your credit card information will not be stored on smartphones or their related devices or on Apple’s servers. Because of that, in a short time, Apple will quickly convince Apple Pay customers that its system is far safer than using a credit card. No more mag stripes! No more exposed numbers. No trace, theoretically at least, for Russia’s invisible army of criminal hackers to track you through. The more secure chip form of transaction which the U.S. Justice Department has been touting for close to a decade—although it would mean higher origination start-up security costs—creates an incentive for wholesalers and retailers to install mobile transaction hardware.

As one hand tends to wash the other in Tech, and Apple Pay works exclusively through their two new smartphones, the iPhone 6, the larger iPhone 6 Plus and the Apple iWatch, the new status quo will surely encourage Google, Amazon, Microsoft, Samsung and others to make their own deals with retailers and banks reach similar deals with retailers and credit card companies, making mobile payments more widespread, according to Forbes.

Apple Pay Aims to Be Your Whole Mobile Wallet

Apple Pay also fits into Apple’s Passbook app, allowing customers to store coupons, and merchant loyalty cards digitally. Payment is delivered to the terminal using a technology called Near-Field Communication, or N.F.C., via a chip embedded in Apple’s new iPhones. Eventually, tens of thousands of businesses will sign on.

Mobile wallets have been tried before, but didn’t work out. Google used N.F.C. technology in one botched attempt, followed by a start-up Softcard. Both have been hamstrung by the separate deals and badly thought-through promises of exclusivity. Asking people to get used to using three such Mobile Wallet systems will never work. Customers want more simplicity, not less! Consequently, the Apple Pay system looks set to blow all of its rivals out of the water.

Apple’s only true hurdle to wide-scale iPhone-payment domination won’t just be the eBay/PayPal axis, however. Consumers freak out when the ever more shrill Fox-style news machine assaults them with broadcast and online news about breaches at Target and Home Depot.  Forbes quotes a new survey from saying that 62% of Americans “never” or “hardly ever” use their phones to make a purchase, and many say that they will never, ever use their phone to pay for something: 49% of adults ages 50 to 64 don’t plan on it and (unsurprisingly) 64% of adults 65 or older have no interest in swapping their wallet for their smartphone. Even in the youngest, tech-savvy set, 30% of those surveyed, “wouldn’t use their phone to make a purchase”. Of course, the same things were said about Internet shopping in general fifteen years ago. If Apple can break down that last wall of resistance over security, the sky truly is the limit.

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