As more pay by iPhone, banks scramble to keep up

“Ryan Craine hates carrying cash and finds writing checks to be a headache,” Steve Lohr reports for The New York Times. “He doesn’t do much of either anymore — he mostly uses his smartphone to pay for things.”

“Mr. Craine, a 28-year-old tech support worker in Washington, D.C., uses Apple Pay at the stores and restaurants that accept it. About 20 times a month, he turns to Venmo, a digital wallet for transferring money from one person to another, to pay his share of rent, meals, groceries and utility bills,” Lohr reports. “To refinance his student loans last year, he went to an online lending start-up, Earnest.”

“Mr. Craine’s money choices point to the millennial-led shift toward new digital financial services, a change in behavior that threatens to upend the consumer banking industry. The popularity of the services has left the major banks rushing to adapt, even as they have regained their footing after the financial crisis,” Lohr reports. “If the banks fail to meet the challenge, Brian Moynihan, the chief executive of Bank of America, warned in November, ‘it may allow part of our industry to be forever taken away from us.'”

Read more in the full article here.

MacDailyNews Take: For the banks, it may already be too late; some of their business is forever lost.

SEE ALSO:
Apple Pay picks up 58 new US card issuers, approaches 1,000 total banks and credit unions – January 5, 2016
Apple wants to let you make payments through Messages, Mail, Phone, and Calendar – December 31, 2015
Pay Finders app for finding Apple Pay locations reports 750% increase in users in two days – December 28, 2015
Why Apple’s revolutionary Apple Pay is going to be absolutely enormous – December 18, 2015
Apple Pay to take on Tencent’s WeChat Wallet and Alipay in China – December 18, 2015
Apple partners with UnionPay to launch Apple Pay in China – December 17, 2015
Why Apple wants to get into the unprofitable world of payments between friends – December 1, 2015
Apple reaches agreement to bring Apple Pay to China, sources say – November 25, 2015
Apples’ revolutionary Apple Pay expands to Canada and Australia – November 17, 2015
Apple is making a grab for Venmo’s P2P payments turf and might use iMessage to do it – November 13, 2015
Apple discussing mobile person-to-person payment service with major U.S. banks – November 11, 2015

[Thanks to MacDailyNews Reader “Edward W,” for the heads up.]

17 Comments

  1. Evolve or die.

    It would be just fine to see a whole new breed of digital “banks” displace many of the old oversized establishments that have become “Too Big To Fail”, thus are guaranteed a government bail out if they screw up bad. Let them screw up small, a lot, and let new, smaller, more targeted banking services displace them for the good of our economy, our economic security, our stability, and our socio-economic well-being.

    1. There is absolutely nothing about digital banking that would tend toward smaller banking institutions. That is an assumption and may well be the case in the short term. In the long term, because there would no longer be a geographical center to a banks reach, the trend will almost certainly be to fewer and larger banks than we have now, since one of the restrictions to their growth would be removed.

    1. No, not yet, but it has potential for the future. As of now, the earnings from Apple Pay is minuscule compared to the income from iPhones, Macs, the iPad, Apple Watches, and even iPods. It will be important in the future, but right now, Apple Pay only brings in 0.15% on each transaction.

  2. When is Home Depot going to accept Apple Pay again?! It worked fine until they “temporarily” disabled it at stores across the country to work on enhancing the User experience …. 🙁

  3. Yet in Canada I go to places that accept American Express and find that they turned off the card tap ability…..just for that card….all the others work OK.

    “I am not sure why that one is turned off”, the teller will tell me.

    Here in Canada, not only the banks, but also the shops are conspiring against Apple Pay. So far Tim Hortons and Starbucks have been accepting it. I think if you have an American address card it is more widely accepted. Canadian cards, not so much.

  4. Perhaps I have a different lifestyle than the rest of you, but my usual supermarket and Costco don’t accept Apple Pay. Trader Joe’s and Staples do. But I cannot say that I have ever made a purchase at a Starbuck’s in my life. I don’t drink coffee and I’m just not into over priced pastries.

    1. Locally to me, I use ApplePay regularly at –

      Meijer (store, pharmacy & gas station)
      Subway
      Staples
      Walgreen (Rewards card even works with ApplePay)
      Rite-Aid
      BP Gas Station
      Kohl’s (loaded Kohl’s charge card into ApplePay)
      Spartan Grocery Store
      Panera
      BestBuy

      I check every time I check out at a store to see if they accept ApplePay – the Spartan Grocery Store had no idea they accepted it until I tried. It doesn’t take long to put your iPhone near the terminal to see it activates ApplePay.

  5. The biggest issue is getting vendors to start offering Apple Pay and I often try the terminal to see if it will work.
    At some point it will be ubiquitous but is frustrating how slow vendors are to implement.

  6. I noticed the other day that Apple Pay now works at Rite-Aid….wonder if CVS has also awakened to reality? Bought some tires at BJ’s……Apple Pay worked there too!

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