The war for the digital wallet is on, but this newer digital product does not signal the end for these companies, off course not. To the contrary, there is a clear need for Apple Pay to leverage technology partners like MasterCard, Visa and American Express. Apple has to leverage their platform and technology to deliver true value to the consumer and be successful.
It is about an Integrated, End-to-End Experience for the Consumer
The success of Apple Pay and other digital payment solutions will be directly dependent on how integrated the experience is. It will be critical to address the current pain points in the purchase user journey. Comparison shopping, loyalty programs, discounts and incentives are just a few of the key elements that need to be considered in delivering a true end-to-end experience.
Apple needs the payment platform to be successful
Visa, MasterCard, American Express and even newer players in the Digital Payment Technology space like PayPal are doing the heavy lifting around the transaction processing and integration with the financial services network. Apple is not going to replace the payment platform, but leverage it.
Apple Pay will increase the volume of transactions for them. However, cash and plastic will continue to dominate the payment behavior for the foreseeable future.
Apple needs to drive the iPhone 6 and iPhone 6 Plus in the market
According to Bloomberg and International Data Corporation (IDC), in the US, the competition is steep for new subscribers as there are more wireless devices than people. So it comes primarily to upgrades in the US and expectations for penetration in the international market place. However, having the new iPhone 6 and 6 plus in the hands of consumers does not translate immediately to adoption of Apple Pay in the consumer behavior.
Apple needs the merchants to become part of the contactless payments ecosystem
Contactless payment technology is not new. It has been around for more than 10 years. However, it has not been massively adopted by consumers and merchants. There will need to be incentives for the merchants to implement the new point of sales technology including security, speed and convenience.
All the players are important in this ecosystem. Consumer behavior could be influenced by increasing the footprint of the contactless payment ecosystem. More merchants, more points of sale are important. Better integration to support consumer behaviors like price check and search will make it more robust.
No one doubts that Apple Pay is very appealing, but in the context of the ecosystem is just one piece of the experience puzzle.
Design and User Experience continue to be critical
Our world is evolving rapidly, design and user experience continue to be mission critical to drive successful adoption of newer innovative products, applications and technology. Apple Pay provides a big push to technology pioneers like MasterCard and Visa in the race for increased acceptance of contactless payment technology.However, consumers and merchants need to come on board to really move the needle in a payment world that is still dominated by cash and plastic.