Just after Apple Pay launched in the US, I wrote this article about what to expect. So, just over a year and a half later: did Apple Pay change the status quo?
In short, the answer is no. Well, not yet anyway. The issue of scale of adoption for Apple Pay continues and as I said at launch, I think this will take several years to play out although there are positive signs for the future.
In the US, reports suggest Apple Pay adoption and usage has stagnated. In the UK, Apple Pay announced tie-ups with most UK banks despite interchange on Credit and Debit falling. As to what the earnings and broader commercials were, I suspect little was in it for either the banks or for Apple Pay, but this hasn’t yet generated wide-scale take-up. No doubt the gadget community, ‘generation X’, has made up a large proportion of early adopters.
For Apple Pay – or indeed any new type of payment technology - ultimately the value proposition needs to be underscored by a killer convenience factor: something that a bank card really can’t do.
Outside of the UK, a key issue for Apple Pay is tokenisation and merchant acceptance. Many smaller businesses and retailers don’t accept Apple Pay yet. Even in the UK where tokenisation presents less of an issue, I am not being asked for Apple Pay by our merchants.
So what’s next for Apple Pay?
Apple’s recent announcement of Apple Pay going ‘in-browser’ could be the game changer: Apple confirmed that with iOS 10, Apple Pay will open up for in-web purchases in addition to in-app purchases on iOS devices. This means iPhones and iPads, as well as Macs, will leverage Touch ID and may even add a Touch ID sensor hardware to the next model of Mac in less than a year. The advantage of both methods is ease-of-use and reduced fraud as they use biometrics and tokenisation.
If they get this right clearly there could be a real competitor for PayPal’s Buy Now button. Again, scale may prove to be an issue – Apple will need to work with all the PSP/Gateways and Acquirers to encourage adoption and understand that acceptance and issuance go hand in hand.
Also on the horizon are Samsung Pay and Android Pay. Both are well poised to be substantial competitors over the coming months and offer points of differentiation in Magnetic Secure Transmission and Google Analytics respectively.
The space is hotting up and a new focus on in-web could mean the last quarter of 2016 turns out to be a new war of the in-web pay buttons from PayPal and the three mobile “Pay” solutions.
Between now and then I’m sure contactless cards will continue to grow in attractiveness for consumers because of their robust, speedy and slick experience. Contactless cards may beat the “Pay”s at point of sale, but a reinvention of them for in-web will see new converts.
About Andrea Dunlop
Andrea Dunlop joined Paysafe Group (formerly Optimal Payments) in February 2013 with a primary focus to establish Paysafe’s Acquiring Business in Europe which went live in 2014. Andrea’s portfolio includes management and P&L of Paysafe’s Merchant Acquiring and Card Solutions divisions for Europe. With over 23 years’ experience in the financial sector, Andrea has in-depth knowledge across many aspects of payments; from Acquiring and Issuing, to Mobile solutions. Andrea is also a member of the Emerging Payments Association (EPA) Advisory Board and was voted number one in the 2016 Payments Power 10, which recognises the top ten influential contributors to the payments industry.
About Paysafe
Paysafe provides digital payments and transaction-related solutions to businesses and consumers around the world. Paysafe makes transactions easy by enabling fast, convenient and secure ways to pay-before, pay-now and pay-later through its digital wallets, prepaid card, payment processing and card issuing & acquiring products and services. We believe that every point of every payment should be relevant, simple and safe. Paysafe Group plc trades in the FTSE 250.
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