Banks race to gain Apple Pay advantage

“US banks are in a marketing race to persuade users to choose their cards as the default option under Apple Pay – the technology group’s mobile payments system launching next month,” Tom Braithwaite, Camilla Hall, and Tim Bradshaw report for The Financial Times.

“But while all the major banks have allocated large budgets to the battle, they do not have a free hand in what they can do,” Braithwaite, Hall, and Bradshaw report. “Marketing staff from the banks are due to meet at Apple’s headquarters in Cupertino on Tuesday, according to people familiar with the matter, to receive strict guidelines on how they can advertise Apple Pay to customers.”

“The largest card issuers – led in the US by JPMorgan Chase, American Express, Bank of America, Wells Fargo and Citigroup – are already eyeing the benefits of having users nominate their cards as the default card on Apple device,” Braithwaite, Hall, and Bradshaw report. “‘It’s a healthy competition,’ said Kristin Lemkau, chief marketing officer at JPMorgan Chase, which had commissioned advertising ‘creative’ material well in advance. ‘We wanted to be first to have our creative about Apple Pay launched on our mobile app, on our website, in the 5,600 branches, on our ATMs, and on our Times Square sign. We were up that night.'”

Read more in the full article here.

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  1. This reminds me of when all the major music labels first signed up for iTunes and unknowingly turned over all the power in that industry to Apple. How long until the major banks realize that Apple now has that same level of influence in their industry?

    1. A telling portion from the article (mentioned on AppleInsider):

      “Uptake for rival systems that predate Apple Pay, like Google Wallet, has been comparatively sluggish. Some have suggested that banks are reticent to hand over consumer data to Google, whose main business is advertising; Apple, in comparison, makes money by selling hardware and has little interest in logging customers’ spending data, instead choosing to strike financial deals with banks.”

      I think this is what they were talking about when they said ‘working in their own interests instead of the user experience’ (I’m paraphrasing).

      1. It’s just like mobile providers and record labels. Apple’s model includes a built in incentive for partners to buy in and market the system on Apple’s behalf.

    1. I was down voted for it, but I still say that this is it overall, but for me, U2’s free album was bigger, just because it will still be years before I’ll have an NFC iPhone or Apple Watch. Seriously, how much shopping do you have to do for this to have a big impact on an individual’s life? I live 70 miles from “civilization”, too – it will be years before local businesses accept such payments, too. Except McDonald’s, and I avoid that place all I can.

      1. And not to forget Europe, where large parts of daily business are still done cash-only.
        Where I live, it’s not uncommon to buy a 50k used car – all in cash.
        Though, of course, NFC would often be much quicker.

  2. Surely people will use a particular “card” through Apple Pay for the same reason they had the actual card in the first place? It will be down to the interest rate on the card, the amount of credit given, cashback, interest free period, balance transfer rate, etc, etc. I don’t see how that would really change that much.
    Credit Cards were always effectively Credit Accounts with a Card, but now the Card will become almost deprecated.

      1. The thing is though, they’re never going to offer terms that are suitable for every single credit card holder. That’s why there are so many cards out there, people with crappy credit pay huge interest, and so on. There is certainly room for simplification, and certainly room for Apple to do something, but they’re never going to want to finance everybody regardless of circumstance.
        With iPhones Apple has the customers who spend money, but there is no way all those customers can actually afford to, so they can’t cherry pick in the same way.

  3. It sounds as though the banks are hoping they can advertise WITHIN the Passbook app. I will be extremely disappointed if Apple allows this. There are plenty of ways for the banks to advertise outside of the app. Allowing them in would begin to diminish my iPhone/ Apple experience and degrade it towards more of an Android one. Apple should tell the banks to have a good cry and get it out of their system, it doesn’t need their advertising dollars. It’s al about user experience and that is generally not something Banks know anything about

  4. Forget it. Everyone is already using Google Wallet because it’s been around since 2011. Android is winning. There must be a couple of billion Android smartphones by now using NFC mobile payments.


    Once Apple Pay is implemented on the new iPhones, mobile payments will probably jump tenfold. And I’ll be one of them using it. To me, Apple Pay is a really big deal. I’m sure the NYCTA is going to utilize it. They’d be stupid not to considering all the Apple retail stores in the city including Grand Central Terminal.

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