American Express and Visa love Apple Pay

12 years ago

“Simplicity is Apple’s pitch as it leaps into mobile payments, which Forrester Research estimates will total $31 billion this year and $90 billion in 2017. So far Square, Google, and Softcard — a wallet app backed by the three largest U.S. wireless carriers — have struggled to prove to retailers that they have a winning system,” Tim Higgins and Elizabeth Dexheimer report for Bloomberg. “‘Most people that have worked on this have started by focusing on creating a business model that was centered on their self-interest instead of focusing on the user experience,’ Cook said at the iPhone launch.”

“Apple isn’t the first company to enter the field with a huge pile of cash, but Apple Pay, launched on Oct. 20, has two advantages,” Higgins and Dexheimer report. “The first is design. Once their credit or debit cards are on file in the Passbook app that comes with an iPhone 6 or 6 Plus, shoppers don’t need to key in their passcodes and call up an app to use the service. The iPhone loads a ‘pay with Touch ID’ message when its shortwave wireless transceiver is close enough to a card reader at a checkout counter. Then all it takes is a fingerprint.”

“The second advantage is Apple’s partnership with credit card companies and banks that it says account for more than 80 percent of U.S. credit card purchases, allowing the iPhone maker to piggyback on their checkout systems. Apple will also collect fees from the credit issuers, according to three people familiar with the deals who weren’t authorized to discuss them,” Higgins and Dexheimer report. “‘It was obvious that the Apple environment was going to be the launch partner,’ says Jim McCarthy, head of innovation at Visa. Apple’s involvement ‘became a real rallying cry to get everyone moving in the right direction.'”

Read more in the full article here.