The launch of Apple Pay: analysis and reaction

Apple has announced the launch of Apple Pay, as the consumer electronics company made a major play in the mobile payments space.

The service will be compatible with iPhone 6 and iPhone 6 Plus, which were also unveiled by tech company's CEO Tim Cook during a special Apple event in California, yesterday. A number of retailers in the US have already signed up to support Apple Pay in their stores, with the announcement seen by the retail technology industry as a significant move in the wider roll-out of mobile payments.

Using a near-field communication (NFC) antenna design, a dedicated chip called the Secure Element and the security and convenience of Touch ID, the system allows users to purchase goods with the tap of their phone once they have set up an account by entering their credit or debit card details.

Apple Pay supports cards from American Express, MasterCard and Visa, and will initially be available for use in Apple's own retail stores, as well as Bloomingdale's, Disney Store and Walt Disney World Resort, Macy's, McDonald's, Staples, Subway, Walgreens and Whole Foods Market, among others.

Eddy Cue, senior vice president of internet software & services at Apple, said: "Security and privacy is at the core of Apple Pay.

"When you're using Apple Pay in a store, restaurant or other merchant, cashiers will no longer see your name, credit card number or security code, helping to reduce the potential for fraud. Apple doesn't collect your purchase history, so we don't know what you bought, where you bought it or how much you paid for it. And if your iPhone is lost or stolen, you can use Find My iPhone to quickly suspend payments from that device."

Essential Retail has collated comments from various retail technology industry representatives, who have offered their opinions on the launch of Apple Pay.

Ken Chenault, CEO of American Express, commented: "Apple Pay is the kind of innovative thinking that brings the worlds of online and offline commerce closer together. We're excited to work with Apple to offer card members and merchants a simple and secure way to make purchases in stores and on apps."

Owen Geddes, CEO of beacon technology provider Appflare, said: "Apple Pay is a game-changer for retail. To date, consumers have been able to receive offers, content, coupons, vouchers and loyalty via in-store beacon networks, which communicate directly with their apps. Apple Pay completes the mobile shopper experience."

Alain Falys, co-founder and CEO at mobile payment and loyalty platform Yoyo, remarked: "Ultimately, mass adoption of mobile payments requires general awareness and the blessing of a trusted authority on consumer trends/behaviour.

"Apple is one of the few companies that has this mandate, arguably perhaps the only. Consequently, its enabling is going to give a major boost to the industry, creating willingness on the part of consumers to connect their phones with credit cards, use it as a primary payment device, and so on."

Mark Prior-Egerton, solutions marketing manager at The Logic Group, which announced this week that it is set to be acquired by Barclaycard, said: "While there has been the impetus within the industry to make wallets an everyday reality, consumer interest doesn't seem to quite have been piqued just yet; even with the likes of Google, PayPal and Amazon bringing their products to the table.

"Apple, however, has the brand recognition, customer base and infrastructure to really push digital wallets to the next level. Coupled with its reputation as a technology kingmaker and the safe money would be on us seeing a real explosion in mobile wallet usage in the coming months."

Souheil Badran, senior vice president and general manager for Digital River World Payments, stated: "For merchants, the outlook is less certain and there remain more questions than answers right now. The payments market has been inundated with new wallets and technologies in recent years and, with no clear winner among consumers, many merchants have found it difficult to decide what payment offerings to invest in, and when. If Apple can succeed in this space, and offer a ubiquitous solution, it could help simplify the landscape for many merchants. Ultimately, long-term prospects will depend on how it will work with existing payment technologies and, of course, user adoption."

Neil Garner, CEO and founder of Proxama, said: "Mr Cook's observation that previous mobile payments platforms had failed because they did not focus on the customer experience is absolutely right: Apple Pay’s design interface and ease of use certainly helps this, but it’s all the other things beyond  just payments that NFC technology offers to enhance consumers’ everyday lives.

"Apple’s foray in to NFC is a landmark and will ignite the mobile payments market globally. NFC is THE technology for point of sale payments and aligns with the card scheme work we have been doing for years, but now there is even more impetus for merchants to roll out contactless payments beyond the initial supporting merchants that apple announced today."

Martin Smethurst, managing director for retail at Wincor Nixdorf, commented: "This is an exciting move by the company and sends out a clear signal to competitors but the reality is it's just the latest in a long line of ways for consumers to pay for goods and services.

"What’s significant is that it gives retailers another channel to engage with today’s device driven consumer which can surely only positively impact the shopping experience in-store. That said the real challenge for retailers is to ensure that all the channels work together seamlessly, and provide that much-needed consistent experience customers have come to expect, or they will just walk away.”

Apple also used yesterday's event in the US to reveal that it is venturing into wearable technology through the launch of the Apple Watch, which will allow consumers to answer calls to their iPhone, send messages and monitor fitness. The Apple Watch will also work with Apple Pay at the over 220,000 merchant locations across the US that have contactless payment enabled.

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American Express



The Logic Group

Digital River World Payments


Wincor Nixdorf