Apple just announced the new iPhone 6 and iPhone 6 Plus. Brilliant new devices, with a larger and better screen, improved CPU (A8) and better performance. But I don’t want to highlight the full new features, which you can read on the Apple website, but focus on one of the top new features Apple introduced the new payment system, Apple Pay which is going probably to change the game in the mobile payments scenario.
It’s already a couple of years, Android and other devices, NFC is incorporated inside smartphones, but with a limited hype. Even my beautiful Nexus 5 has it but almost no one is using it.
The real difference now, is that Apple introduced Touch ID with iPhone5s, and Apple Pay, is the second and last step toward the complete integration of a full mobile payment system.
As Tim Cook said during the last keynote, today the payment process is very long: we have to search and pull out our wallet, choose the card and give an ID before processing the payment.
Now with Apple Pay, we just need to upload our card in PassBook, register it and pay just nearing our iPhone to the NFC receiver and approve the payment with a tap through Touch ID. Simple, fast and even more secure than a traditional credit card.
Moreover, in case you lose your device, you don’t need to block the card, but you just need to suspend all the payments from the smartphone using Find My iPhone.
This is pretty cool considering that one of the top reason why people are not using mobile payments is because they’re concerned about security (46% of people). Another reason behind the reluctancy of digital wallets is the impossibility to pay easily using a credit or debit card (Thrive Analytics). Apple seems to have found a solution for both the problems with Apple Pay.
Same thing is for ecommerce. Every day in the States there are over $1 billion in ecommerce transactions and most of the time the payment process is quite the same than offline. You need to fill out forms, verify your email, your data and insert manually your credit cards information.
Also this process has been redefined by Apple. Many merchants have already signed to have the “Apple Pay” button on their ecommerce checkout to make the process shorter and faster.
Apple said won’t store personal information such as, shopping history or credit cards data, but just encrypt those personal information to avoid online risks.
As I said this is the first time a payment system is fully integrated in a smartphone. The Touch ID combined with Apple Pay and NFC will absolutely change the idea we have right now about mobile payments. There isn’t a better moment, as today, to start changing a really old habit as the credit card is.
Apple has closed deals with major banks like JPMorgan Chase, Bank of America, Citigroup, and more. Among merchants are names as McDonalds, Macy’s, Walgreens, Nike, and more. A recent news, reported by MacRumors said that Apple will also collect fee from banks, for every purchase made with Apple Pay. It would be huge for the tech giant, considering the million users every day would buy with their smartphone.
Today we can already choose among different types of mobile solutions if we are retailers. Square and Payleven , for example, are already giving alternatives but always around a credit card payment system. Same thing for Paypal.
How the market will react to this innovation? And how companies, such as those listed above, will change in order to pursue the continuous innovation?
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