The announcement that Apple’s new iPhone 6 would come equipped with a mobile wallet had been hotly anticipated by experts, but the details of the new system that many believe could pose a considerable threat to payment giants such as PayPal have divided industry experts. Apple’s CEO Tim Cook believes that “Apple Pay will forever change the way all of us buy things”.
Apple has embedded a fingerprint-based security system which it refers to as ‘near field communications’, allegedly a more secure service than existing credit and debit card methods. Growing concerns about security and recent reports of various breaches will help Apple in persuading customers to adopt. Whilst PayPal hides payment details from suppliers, Apple will also hide details from merchants (meaning no addresses or credit card numbers will be visible), which will be a key selling point.
Fingerprint-based systems have tried and failed before, but Apple is in the best possible position to make such a method succeed. Users will hold their phone against a standard credit card reader, but the payment will only be accepted when a correct fingerprint is applied, much like a pin code has been used traditionally.
There are no guarantees of success for Apple, however. Customers have traditionally been reluctant to adopt payment systems, and furthermore want uniformity. Apple’s system is currently compatible with only a fraction of the number of merchants compared to those who accept credit and debit card payment.
Here’s what some experts have to say on the issue:
Mark Prior-Egerton, The Logic Group: “While there has been the impetus within the industry to make wallets an everyday reality, consumer interest doesn’t seem to quite have been piqued just yet… Apple, however, has the brand recognition, customer base and infrastructure to really push digital wallets to the next level.”
Patrick Salyer, CEO of Gigya: “With its mobile payments capabilities, the new iPhone finally pushes Apple squarely into the world of consumer identity. Apple is finally joining the party armed with hundreds of millions of iPhone users and over 200 million credit cards on file. Apple may have found the mobile payments holy grail by tying identity, credit cards, and NFC together.”
Neil Garner, CEO of Proxama: “This is a big step forward. With Apple on board, NFC gets the final seal of approval it needs. Apple’s formidable strength is in convincing consumers that they need something, so in that regard its support of NFC is a turning point for worldwide consumer adoption. It is likely to spark a reaction from Android and Windows phone makers who will want to ensure their devices match the innovative uses of NFC we expect from Apple.”
Only time will tell how the iPhone’s new mobile wallet, set to be released in the coming weeks, will fare in the world of payment platforms.