A full week has passed since Apple’s announcement of Apple Pay and the market response has been swift and extremely favorable to Cupertino. For years the market anticipated that “this was the year” to launch a payment service. But true to form, Apple waited until it found the right mix of technology, business model, and partners to launch what appears to be a truly elegant solution.
Regardless of the technical details or which business deal was struck with which industry heavy hitter, it’s clear that Apple is committed to shift consumer behavior from their leather wallet to their iPhone under a brand that is synonymous with delivering the most compelling user experience possible.
However, there are going to be questions regarding what’s next for Apple Pay. For example, will consumers be driven to the Apple Pay or Passbook application as the only interface? Or, will Apple follow its history of exposing APIs to the application developer community.
This question speaks directly to consumer adoption because most consumers regard their relationship with their bank, i.e. their money, as one of the most revered of all. Moreover, nearly all of the named banks and merchant partners have spent many years and millions of dollars nurturing their own iOS application as the low cost, high touch channel to their customers.
As the Apple Pay service evolves, it stands to reason that Apple would expose these APIs to allow the consumer to choose the brand relationship for both banking and merchant applications, since that’s what consumers do today. The Apple brand is extremely powerful but this is about getting a consumer to transition from a leather wallet to an iPhone. One of the best ways to drive success in this transition is to allow the consumer to bring the bank and merchant brand relationship with them, in addition to Apple Pay.
Another question that was asked in the press was regarding offers, loyalty, coupons, etc. Will Apple Pay integrate the merchants existing programs into their own application?
The reality is that these marketing tactics are a part of our daily lives today. But in a paper world the value is often diminished because consumers frequently forget to bring their plastic loyalty cards, misplace the paper offers, or worse yet fumble through their wallet or purse while standing in line at a retailer looking for any combination of these… plus their payment card.
There is no reason for this in a mobile environment where all the cards and paper can be digitized and integrated into an application with one seamless tap of the iPhone. This is another area where Apple Pay may excel in the future. Fundamentally this is a consumer experience question and few other companies have demonstrated such a track record of simplifying a complex technology into a user-friendly experience.
It’s been said that Apple has contemplated the inclusion of mobile payment technology since the first version of the iPhone more than seven years ago. Time and again, the industry speculated, anticipated and then regrouped when it didn’t happen. What’s clear is that Apple is in this to win and this is just the beginning of what could become a core business of the company. What we know of Apple Pay today may look very different in the future as Apple hones the value proposition to exceed the expectations of their customers… as they frequently do.
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