From the Desk of Gina Gilbert
This week, Apple unveiled its’ NFC-based Apple Pay that allows users with an iPhone 6 or 6 Plus to pay securely by simply pressing the Touch ID reader and placing the phone near an NFC terminal. A subtle chirp and vibration indicate that a payment has been made.
The power behind this announcement is the fact that Apple has hundreds of millions of consumers who have their credit cards on file in their iTunes accounts. In addition to the card that these users already have on file, they can add additional cards by taking a picture of the card in order to register it.
Visa, MasterCard and American Express will be the payment networks that participate at launch in October 2014. Additionally, top bank issuers, that represent 83% of the credit card transaction volume, will be on board at launch.
Merchants and retailers, while many will participate in Passbook, also stand to benefit from a merchant-branded custom app to connect with their consumers on a deeper level. Apple has stated that it will not save or track transaction information so merchants who are interested in understanding purchasing behavior, recency, frequency and monetary spend would achieve this through a custom mobile app. Establishing a new mobile channel for 2-way communication enables merchants to send targeted, relevant information for increased sales and share of wallet.
Both of these solutions play an important role in the mobile payments landscape and each reinforces the evolution and adoption of mobile payments as a real consumer payment option.