Why mobile payments people are drinking Apple Pay Kool Aid…

why mobile payments pros are drinking apple pay kool aid

The financial tech sector seems incredibly excited at the potential of Apple Pay. This is what some of the players in that sector are saying about Apple's new mobile payment system.

Stay relevant

Banks know they face deep competition in the financial technology space -- and seek strong partnership to stay in business.

“The benefit for the issuers is it allows them to maintain their brand relevance, whether customers use a physical card or smartphone, and it potentially lowers fraud costs."

Josh Beck, equity research analyst at Pacific Crest Securities. (BI).

"If you roll the tape forward, and people aren't carrying their phone in one hand and their wallet or their cards in the other hand, if they're only carrying their phone, we want our cards to be in that phone."

Wells Fargo CFO, John Shrewsbury (American Banker)

Security is critical

Card fraud costs a lot -- you don't want that problem to grow with mobile payments, and the banks think this isn't going to happen.

"Combining the trust, scale and security of Visa payments with Apple Pay will accelerate adoption of mobile payments."

Charlie Scharf, Visa CEO. (Press release).

“… MasterCard holders will soon be able to make payments from their [Apple device], knowing every purchase is secure and offers all the same guarantees and benefits they’ve come to expect from using their MasterCard.”

Ed McLaughlin, MasterCard. (FinExtra).

"Mobile payments have been evolving…[There are] enough parts of the puzzle put together to commercialize the capability. This is not a pilot… This is not a test."

US Bank Chief Innovation Officer, Dominic Venturo (American Banker).

NFC done right

I may have been wrong to pronounce NFC dead, but it isn't the end to end enabling system for mobile payments it was thought to be, just a piece of the puzzle.

"Consumers that have used NFC mobile payments have liked it, but haven't liked not being able to use any payment card they want in their mobile wallet. Apple's wallet overcomes this challenge by letting consumers' use the card of their choice through their iTunes account. It's a smart move and a big win for NFC."

Randy Vanderhoof, Smart Card Alliance (PaymentsSource).

"I think it's really a tipping point. Now all the major firms offer NFC and NFC payments to consumers."

Paula Hunter, NFC Forume (CNBC).

"Apple Pay looks to be the first usable payment experience that consumers and marketers will actually use."

Jack Philbin, Vibes CEO (Internet Retailing).

Biometrically secured

Inventing a biometric system that has been proven to be secure in an incredibly competitive marketplace is going to pay for its own R&D.

"Apple’s approach is to improve the stickiness of its platform by creating a seamless payment experience with robust security linked to biometrics through its iPhone TouchID.”

John Abraham, Analysys Mason (Internet Retailing).

"Apple's commission could be minimal…potential annual revenues in the hundreds of millions, not billions."

Toni Sacconaghi, Bernstein. (International Business Times)

But needs the retailers

There's still the problem of terminals. Apple doesn't yet reach every retailer, or even a substantial chunk of retailers. The challenge will be to reach the retailers with low cost payment systems.

“Apple will have to convince consumers that its Apple Pay system is reliable, convenient and, most importantly, secure… take up will likely be accelerated by use of the retail partner loyalty schemes."

Marketing Science analyst Richard Snoxell (City AM)

"At this point we have no plans to accept Apple Pay."

Best Buy, Jeff Shelman (Sun Sentinel).

Also Read

Google+? If you use social media and happen to be a Google+ user, why not join AppleHolic's Kool Aid Corner community and join the conversation as we pursue the spirit of the New Model Apple?

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Copyright © 2014 IDG Communications, Inc.

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