Apple Pay – the future of mobile wallets

Magento admin
Magento: Adding a Custom Form Element to an Adminhtml Form
October 17, 2014
UX Design Featured Image
Introduction to UX Design for eCommerce Development
December 8, 2014
Show all

Apple Pay – the future of mobile wallets

Now that Apple’s special event is over, and the iPhone 6 is available to purchase and people have had time to come to grips with the awesomeness that is Apple Watch, lets discus the really big news of last month’s event.

What could be bigger and more exciting than the Apple Watch? you’re asking. Well, let me tell you. Apple Pay was the most exciting announcement at Apple’s special event. Sure we all drooled over the watch and oohed and aahed over the bigger iPhones. But none of those items are real game changers.

Mobile Wallet

Mobile Wallet

The new iPhone is just another phone, and the watch while incredibly cool is just another smart watch, nothing truly revolutionary there. But Apple Pay? Well, that has the potential to disrupt entire industries, and completely revolutionise eCommerce in app development.
Apple Pay launched this week.

The Mobile Wallet
The Mobile Wallet has long been the dream of giant internet companies (google, amazon, etc.) the cellphone service providers and thousands of start-up companies. The big hurdle, obviously, is getting people to use a mobile wallet. Some attempts have been more successful than others, but none have truly cracked it yet.
The biggest problem being that they have been trying to create a mobile wallet, basically an app that acts as a wallet… they all missed the fact that they should have been thinking of the device itself as a wallet.

People put all sorts of things into their wallets, cash, credits cards, loyalty cards, business cards, tickets, coupons, etc. There was never an app that allowed users to do this sort of thing.

Another really huge stumbling block with most mobile wallets is that people have to transfer money into that wallet from a bank account. And then they cannot spend that money outside of that app. What a mission! Especially if you cant take your money out of the app again.

People also don’t want the service providers, 3rd party developers or anybody else to have access to their bank accounts and records.

Apple laid the groundwork for using your device as a wallet with the introduction of passbook in 2012. Passbook allows you to keep virtual cards, coupons, tickets, boarding passes, etc. all in a single place.
Adding credit cards was the next logical step.

Apple bypassed the whole idea of a payment app by approaching the big credit card companies directly.

Now users don’t need to install an app to make payments, they do not need to transfer money out of their real world bank accounts into a virtual one. Now they can make credit card payments using their credit cards without having to actually carry a credit card. Sheer genius.

Of course, it remains to be seen how quickly users will adopt this new technology when it rolls out in the US this month – but considering Apple’s clout and the amount of retailers and banks already on board I imagine it will catch on very quickly. It may take some time before the rest of the world catches up – but it will happen.

For the first year or so Apple’s passbook was useless to people in South Africa – but that’s starting to change. Already I have my Discovery Health card and my Ster Kinekor Vitality card in passbook – that’s two less physical cards I need to carry in my wallet. I get my BA and Kulula boarding passes on my phone, meaning less tickets and paper stuffed into my pockets – and less chance of me losing them.  The idea of adding credit cards to my passbook and not having to worry about the physical ones is just too sweet.

Apple Pay uses NFC (Near Field Communications) to communicate/connect to Point Of Sale systems. The encrypted communication between the devices means that Apple does not know what you’ve purchased, how much it cost, or where you purchased it. How it actually works is far too complex for this article.
Here is a pretty good explanation of how it all works:

Apple haters will quickly point out that Android phones have been NFC compatible for 2 years already. Yes, they have – but no one is using them. In fact, Walmart and Best Buy are/were about to drop NFC compatible Point Of Sale systems from their stores, because no one was using them. I bet they’re going to adopt a wait-and-see position now, and watch the uptake of Apple Pay very carefully. Apple has often let other industry players enter a market, allowed them to fail, before entering with a better product.

Why others have failed.
One of the biggest issues with google wallet – is that you’re giving your purchase history and habits to a company that is notorious for selling user info to advertisers.

Would you really want google to have access to your banks accounts? To know where you shop, and how much you spend?

Apple isn’t interested in tracking what you buy for how much, and where you got it – the very things that Google would probably kill for, and are so desperate for they never thought of giving up access to that info for a small transactional fee.

And just think of the benefit for the banks. How much do they spend yearly on printing new and lost cards? How much will they save on courier costs? And fraud? Using a virtual credit card is much safer and more secure than using a real one.
Now the waiter at your restaurant, or a teller at a retail store, doesn’t get to see your card number, expiry date or even your name; personal info that was all too visible when you handed over your card.

Even with Apple Pay’s massive rollout this month it will be a long time yet before people ditch their wallets, but this is definitely the first step in the right direction.
Even Bill Gates thinks so.

It will be easy enough to get consumers to use this technology, but the real buy-in will have to come from the retailers, as they’ll need to install NFC-ready Point-Of-Sale systems, and that will be quite a task in South Africa. But it will happen…. Eventually.

The day of a workable mobile wallet has finally dawned.