Ondrej Holzman Today, mobile devices can already replace anything. Their "transformation" into a payment card is very useful, when you just hold your phone to the terminal and you're paid. INe world of Apple, this service is called Apple Pay and 2015 was her first test.
"We're confident that 2015 will be the year of Apple Pay," Tim Cook reported, considering the initial interest and response from merchants at the beginning of last year. Just a few months before the head of Apple the service itself featured and in late October 2014, Apple Pay was official launched.
After about fifteen months of operation, we can now evaluate whether Cook's words about "the year of Apple Pay" were just wishful thinking, or whether the apple platform really ruled the field of mobile payments. The answer is twofold: yes and no. It would be too easy to call 2015 the year of Apple. There are several reasons.
It is definitely not worth measuring the success of Apple Pay by some numbers yet. For example, what share does it have in all non-cash transactions, because in the United States it is still a tiny number. It is now much more important to monitor the development of the service as such, the development of the entire mobile payment market and, in the case of Apple Pay, also to draw attention to some specifics that bring a fundamental difference between the American market and, for example, the European or Chinese market.
Competitive (un)fight
If we had to evaluate 2015 in terms of who was the most talked about, then in the field of payments it was almost certainly Apple Pay. Not that there isn't competition, but the traditional strength of the Cupertino company's brand and its ability to expand a new service relatively quickly still works.
The current battle is practically between four systems, and two of them are not coincidentally named the same as the one from Apple - Pay. After the failure of Wallet, Google decided to give up with a new Android Pay solution, Samsung also jumped on the same bandwagon and started deploying Samsung Pay on their phones. And finally, there is a key player in the US market, CurrentC.
However, Apple has the upper hand against all rivals in most points, or at least no one is better. While ease of use, protection of the user's private data and security of transmission can be offered in a similar way by some competing products, Apple was able to recruit a significantly larger number of cooperating banks. This, in addition to the number of merchants where mobile payments can be made, is key in terms of how many potential users the company can reach.
The fact that it is a platform closed to the Apple ecosystem can appear as a possible disadvantage of Apple Pay against all the mentioned. But even with Android Pay, you can't pay anywhere other than on the latest Androids, and Samsung also closes its Pay only for its phones. Therefore, everyone works in their own sand and has to work primarily on themselves to reach customers. (The case is slightly different with CurrentC, which works on both Android and iOS, but is far from a direct replacement for a payment card; moreover, it is only an "American" thing.)
Since different mobile payment services do not directly compete with each other, on the contrary, all companies can be glad that they gradually entered the market. After all, any such service, whether it is Apple, Android or Samsung Pay, will help spread awareness and the possibility of paying with a mobile phone, at the same time it will force merchants to adapt to the new trend and banks to distribute compatible terminals.
Two worlds
Maybe the previous lines don't make much sense to you. What is the need for education about mobile or even contactless payments, you ask? And here we are encountering one huge problem, the clash of two different worlds. The United States versus the rest of the world. While Europe, and the Czech Republic in particular, is a leader in the field of contactless payments, the United States has fundamentally fallen asleep and people there continue to pay with magnetic stripe cards and swipe them through readers.
The European market, but also the Chinese one, on the other hand, is perfectly prepared. We have everything here: customers used to making purchases by touching a card (and nowadays even mobile devices) to the terminal, merchants used to accepting such payments, and banks support it all.
On the other hand, Americans often do not know about the possibility of paying with a mobile phone at all, because many times they have no idea that it is already possible to pay contactless. Apple, and not only Apple, is doing so poorly. If the user does not know that such options even exist, it is difficult to suddenly start using Apple Pay, Android Pay or Samsung Pay. In addition, if he wanted to, he often encounters the unpreparedness of the merchant, who will not have a compatible terminal.
Samsung tried to solve this problem of the American market by making its Pay work not only with a contactless terminal, but also with a magnetic strip reader, but it has hundreds less cooperating banks issuing payment cards than Apple, and thus adoption is hindered elsewhere.
In the United States, there is one more thing holding everything back – the already mentioned CurrentC. This solution is far from as simple as holding your phone to the terminal, entering a code or fingerprint and you're paid, but you have to open the app, log in and scan the barcode. But the problem is that the largest American retail chains such as Walmart, Best Buy or CVS bet on CurrentC, so ordinary customers here have not learned to use modern services.
Fortunately, Best Buy has already moved away from its exclusive relationship with CurrentC, and we can only hope that others will follow suit. The solution of Apple, Google and Samsung is both simpler and, above all, fundamentally safer.
Expansion is a must
Apple Pay was never meant to be a purely American thing. Apple has been playing globally for a long time, but the home country was the first where it managed to arrange all the necessary partnerships. They in Cupertino probably expected that they would get their payment system to other countries much earlier, but in January 2016 the situation is such that, in addition to the United States, Apple Pay is only available in Great Britain, Canada, Australia, Hong Kong, Singapore and Spain.
At the same time, there was originally talk that Apple Pay could arrive in Europe as early as the beginning of 2015. In the end, it was only halfway through, and only in Great Britain. The next expansion to the above-mentioned countries came only last November (Canada, Australia) or now in January, and all this with one major limitation – Apple Pay only supports American Express here, which is especially annoying in Europe, where Visa and Mastercard dominate problem.
Apple is obviously not nearly as successful in negotiating contracts and luring banks, merchants and card issuers to its solution as it was in the United States. At the same time, a large expansion is absolutely crucial for the further development of the service.
If Apple Pay had not started in America but in Europe, it would almost certainly have had a much better start and the numbers would have been noticeably better. As already mentioned, while the entire mobile payment is still a bit of science fiction for the American market, most Europeans are already impatiently waiting for Apple (or any other) Pay to finally arrive. For now, we have to stick various special stickers on our mobile phones or put unsightly covers on them, so that we can at least try the idea of the future of contactless payments.
In the UK, for example, people can already pay with Apple Pay on public transport, which is a great example of using such a service. The more such options there are, the easier it will be to show people what mobile payment is good for and that it is not just some technological fad, but actually a useful and effective thing. Today, almost everyone gets on the tram or subway with a mobile phone in hand, so why bother reaching for change or a card. Again: a very clear and obvious message in Europe, a slightly different and more basic education is needed in America.
Europe is waiting
But in the end it's not so much about the United States. Apple can try its best, but adapting the company (not only customers, but also banks, retailers and others) to contactless payments and new technologies takes time. Even in Europe, the use of magnetic tape didn't stop overnight, only now we have a long-term lead over America - somewhat contrary to common customs.
The key is to get Apple Pay to Europe as soon as possible. And also to China. The market there is apparently even better prepared for mobile payments than the European one. The number of mobile payments made per month is in the hundreds of millions, and a larger percentage of people here also have the latest iPhones needed for Apple Pay. After all, this is also positive news for 2016: the number of the latest iPhones will increase worldwide, and with it the possibility to use the phone for payment.
And since Apple is apparently going to China with its Pay in the coming months, the Chinese market will probably be a more important market for the Californian giant than the American one thanks to its dispositions and the volume of mobile transactions.
In the coming months, Europe will probably have nothing to do but look on sadly. Although, for example, Visa representatives already proclaimed shortly after the launch of the service in 2014 that they were very interested in helping Apple in negotiations with domestic banks and were able to jointly expand Apple Pay throughout Europe, including the Czech Republic, as quickly as possible, nothing is still happening.
Spain, newly added to the selected company, seems rather like a cry in the dark, especially when the agreement is only with American Express, and in this respect we have to consider Great Britain a bit of a solitaire, which does not fully reflect what is happening in the rest of the continent.
Rather “years” of Apple Pay
We can call 2015 the year of Apple Pay, for example, because if a name resonated most often with the media, it was Apple's solution. It's hard to argue that Apple has the most power of all to push mobile payments the fastest and most successfully, just by considering how many new iPhones it sells each quarter that are necessary for Pay. At the same time, competing solutions are also growing along with it, and the entire segment of mobile payments is growing overall.
But we should rather talk about the real "year of Apple Pay" if this ambitious platform finally experiences a real boom. When it fully breaks through in the United States, which is not a question of a year, and above all when it reaches the whole world in full, because if it is to take hold anywhere now, it will be China and Europe. We are currently moving into a longer period of time when Apple Pay is slowly spinning its wheels, which can eventually become a massive colossus.
At that moment we will then be able to talk about that to it's that Apple Pay moment. For now, however, these are still rather baby steps, which are hindered by the larger or smaller obstacles outlined above. But one thing is certain: Europe and China are ready, just knock. Hopefully it will be in 2016.
Personally, I think that nothing will happen in 2016... When I discuss, for example, representatives of mBank, they stare at me as if I fell from a cliff and say, "Who among us has an iPhone or an Apple Watch?" This is such a small percentage that it has no meaning for us and people don't want it, so it makes no sense for us to deal with it.
As I know that it can be different in other banks, but the message is simply that they don't see business in it, so why should they solve it?
"Who among us has an iPhone?" ... On the other hand, I would say that more mobile people mostly have iPhones, and I don't understand what other new payment service they should be dealing with at the moment than Apple Pay... But I guess yes, if they say that, I don't know anyone who has mBank…
We also played it on the note that I don't really want to attract the most mobile people with iPhones... And may I ask, which bank do you use?
I really like mBank, apart from the fact that everything is free (but all banks have that now, so there is no distribution), so I really like their internet banking, being able to rewrite the items in the statement with my own notes and texts, automatic categorization of expenses, labeling of transactions with tags (necessary for quick vacation budgeting), sending money via SMS without knowing the recipient's credit number, dividing transactions in the statement into several items, seeing the budget for the next period on the home page, how many free funds I have , what expenses I have planned and how much money I can actually dispose of in the monitored period from paycheck to paycheck, search for transactions in full text with the helper and with a live display of transactions 4 years ago... I really enjoy these things at mBank and I have not seen them at any other bank, and they have for me a great added value compared to the competition... That's why I use mBank.
But of course it's not all gold to suffer, for example, they have the absolute worst exchange rates when paying by card abroad and I explain this by the fact that people don't know and don't care and that it's quite a big deal for them.. Nothing is simply free.. :)
but the bank has nothing to do with it. It is a payment technology distributor. Which in our case is MasterCard and Visa. The bank will not know at all that you paid via Apple Pay. It will be reported to the bank as a payment card transaction...
Well, that's not entirely true. At least the bank has something to do with this, that it supplies terminals to sellers (shops). And above all, these terminals will have to learn to work with Apple Pay. At the same time, it will need to be cleverly marketed to people, so that the bank will make a noise about it again, for its own sake. Of course, the return can be seen in the long term, but it will not be immediate.
Most of the terminals have long been compatible with us. That's what it's about - our market is just ready. You just have to make agreements, which is the biggest problem.
Exactly. contactless card payment is actually nfc
Really completely on everyone even without entering the pin? Well, I've read something about it, but if it's really tried and it works, I really don't understand what the problem is?
Well, I'm not so sure about this point, I think there must be some settings there, because I think that when I pay with Apple Pay, I won't have to enter a PIN on the terminal even for more than 500 CZK and I'll be authorized only for to use TouchID on the mobile in the case of a watch, even at all, or with the PIN that I enter when putting it on my hand.. And I think that it has to be set somehow.. And if it was already possible, then it would be possible to pay at all the places in CR with an English card in Apple Pay, but I think that's not quite the case..
After all, this is exactly what happens. If you have an American card in your iPhone, Apple Pay also works at Czech terminals.
I also completely disagree with this, somehow the bank, as the administrator of these payment cards, must also participate in this system.
It's just a terrible shame that mBank simply doesn't want it at all and isn't interested in it. If they wanted it, I would be interested in it, write to mastercard/visa apple and find out what is possible, but they definitely didn't act on me like that? And they pretended that it's just an unnecessary expense for the bank anyway and that it's not worth it to them.. :( Which seems like a really sad approach to me.. I thought I just want all of this at any price, but I guess not.. :( And they started something to the effect that if we were willing to pay them, then fine, but according to the survey they found out that they weren't, so we're out of luck.. :(
The moment a bank launches Apple Pay, our whole family switches to it. But unfortunately, I don't think anyone will really launch it anytime soon. On the other hand, similarly, I did not think that Spotify, Netflix would come... We are slowly catching up with the world, so hopefully we will see it too.