Tim Cook and Apple Pay

Apple Pay is Slow to Ripen in 2015

Tim Cook and Apple Pay

Despite Apple CEO Tim Cook’s hope that 2015 would be the “year of Apple Pay,” it may have a harder time making it out of the “first inning” than expected. But maybe not for the reasons you expected.

First though, let’s call a spade a spade – Apple’s mobile payment app is undoubtedly cool. So cool, in fact, that “even hipster rock stars are using it.” The NFC payment system was featured in a Chase banking commercial, where an Urban-Outfitters-catalog-come-to-life group of musicians use it while they tour. The ragtag gang is actually uber-cool Indie band Bleachers, and the Chase commercial is more or less a 90-second spot for Apple Pay.

Even if you aren’t familiar with the Indie rock stars, you may still admit that the potential to make in-store purchases with your phone is great. We have our smartphones and other Jetsons inspired devices cemented to our back pocket anyways, to the point where it almost feels as much a vital part of your existence as your knees or jugular might – particularly if you are part of my social buzzing, app lovin’ millennial generation. In spite of all this, Apple is having a hard time getting the 74.5 billion people who bought an iPhone 6 or 6 plus over the holiday quarter to just be cool and give Apple Pay a go.

So why aren’t people jumping on board and throwing out their bulky leather wallets for an easy, hardwired app? For starters, it’s not super fun if the payment app doesn’t work where you typically shop. Apple does have a fairly substantial list of partnered merchants willing to accept Apple Pay, such as Chevron, Macy’s, McDonalds, Petco, and Apple Stores (naturally). However, they’ve run into some difficulty trying to recruit other major retailers like CVS, Target and Walmart, all of whom are using a competing software called CurrentC. Unless one of these retailers jumps ship and gives Apple Pay a try, it looks like Apple has come against an impenetrable wall of solidarity.

There’s also a lack of incentive for iPhone owners to use Apple Pay. Of course, its much easier to make purchases in-app while shopping online via your phone, since you don’t have to fill out tedious shipping and credit card information. But, there is a definitely lack of “oomph” to motivate shoppers to use it for in-store shopping. Re/code suggests loyalty programs to encourage iPhone holders to try Apple Pay next time they’re buying a McFlurry, filling up their tank or getting a new leash for Fido. It could, ideally, act like a rewards membership program, similar to what American Express does with its rewards card.

Another kink in Apple Pay’s armor may be something consumers have already voiced concern over – security. You don’t need to look very far to find highly publicized data leaks, store credit card breaches and malware that demands a ransom be paid. Though Apple Pay claims to be near impossible to hack because of fingerprint encryption, many still speculate the strength of its security. And it’s not just the threat of data leaks and cleaned out bank accounts that have people worried – there’s also the potential of Apple Pay becoming the easiest and most dangerous gateway to impulse buying. As Oliver Burkeman of The Guardian put it, “the more I think about it, the more I’m convinced something genuinely terrifying was introduced to the world.”

As Cook has come to realize, 2015 being the year of Apple Pay is not a sure-fire guarantee. If there’s one thing we’ve come to know about the ecommerce and tech monoliths that are constantly evolving, it’s that they don’t give up that easily.

Would you feel safe using Apple Pay? Would access to more retailers be enough incentive for you to try it? Let us know what you think in the comments.

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About the Author

Tiana Byers

Tiana is a content marketer and writer. Her favorite author is Oscar Wilde and she is a self proclaimed Etsy addict.

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Tiana ByersApple Pay is Slow to Ripen in 2015

Comments 2

  1. Brendon

    The actual change in payment practices will be forced upon (and from) merchants due to the shift in fraud liability (http://blogs.wsj.com/corporate-intelligence/2014/02/06/october-2015-the-end-of-the-swipe-and-sign-credit-card/). Because retailers will be liable for credit fraud in late 2015, they’ll upgrade all their POS practices to more secure methodologies. This of course will lead consumers to adjust how they pay for stuff and while they can certainly get the upgraded chip-cards, blah blah, they’ll continue to demand higher protection and security – positioning Apple Pay quite nicely for a spike in adoption around Q3-Q4.

    I think CurrentC in it’s current form is a joke. While the underlying technology may be great for Walmart to get back their 2%-3% transaction fees they’ve begrudgingly dished out to Visa for years, the user’s experience for CurrentC is clunky, clumsy, and down right complicated. Expecting people to scan QR codes, open apps, unlock phones, scan again at a register, and then wait for the transaction to process like today’s swipe-and-sign cards is just ridiculously complicated, making mass-consumer adoption questionable at best – Apple Pay is a finger on a button, done.

    I like your post – interesting topic. While I don’t know if this will in fact prove to be the year of Apple Pay, it certainly lines up to be the year of payment methodology redefinition.

    1. Post
      Tiana Byers

      Great thoughts, thanks. Haven’t used CurrentC personally, even though they’re aligned with some of the retailers I frequent often.
      One thing I think Apple Pay has over CurrentC is Apple’s marketing department, and the legion of celebrities inadvertently making cameos in Apple Pay commercials via their past spots using cards like American Express. (http://recode.net/2015/02/09/surprise-apple-pay-gets-more-free-publicity-this-time-from-american-express-and-seinfeld/). With the addition of Bank of America and Chase teaming up to provide publicity, Apple Pay is slowly but surely building credibility and getting in front of the consumer in a way that, to my knowledge, Current C hasn’t done.
      I agree, as more and more consumers begin using these payment processes, better security will be implemented to meet the demand. Will be looking out to see what happens in Q3 – Q4, like you predict.
      Thanks again, Brendon. Great points!

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