If you were watching the stock price of Apple over the course of its keynote last week, you would have noticed that its price jumped not when Apple unveiled the iPhone 6 or the Apple Watch, but rather when it outlined its plans for Apple Pay. This reflects the genuine excitement held by many that Apple may be able to be successful where others have so far failed, and disrupt the way we carry out payments.
Apple Pay revolves around the use of NFC (Near Field Communications) to wirelessly broadcast payment data. While this in itself was far from innovative, what the company had been able to successfully do, was to combine an easy way for customers to sync credit cards to this system, while implementing Apple-specific security features (such as Touch ID). Apple thinks that with a sound technological base, as well as commercial partners, it can see success in this area.
But herein lies the problem. Apple needs major retailers to jump onboard the Apple Pay bandwagon and while some businesses have, others are much more reluctant. Over the weekend Apple’s system took its biggest hit yet, with Walmart and Best Buy both opting out of the Apple Pay system. Together they represent some of the largest chains in the US, every year serving hundreds of millions of customers. Indeed, Walmart is the single largest retailer in America.
These companies have several reasons for not wanting to work with Apple. The first of these is cost: the NFC readers which checkouts would need to be equipped with to use Apple Pay reportedly cost $500 each, meaning they represent a huge upfront expense for little tangible gain. The second, and in the long term more important reason is that these companies have their own mobile payments system which they want to implement.
This comes in the form of ‘CurrenC’ a mobile payments system which rather than using NFC, makes use of custom QR codes. The advantage of this is that retailers do not need to buy expensive new hardware in order to implement this system as QR codes can be read by common barcode scanners. In addition, this system is designed to be multi-platform, meaning it will be available on all mobile devices, not just those used by Apple.
In the coming months and years, we can expect to see greatly increased competition between these kind of systems, and it is still far early to tell if we will be left with just one ‘winner’ or a whole ecosystem of different mobile payment solutions to chose from.
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