Well, it’s finally here! After weeks of anticipation, Apple Pay launched on Monday. Apple also unveiled the iPad Air 2 and iPad mini 3, both with Touch ID sensors and an embedded secure element, which means Apple Pay can be used for in-app payments on those devices as well as the iPhone 6 and 6 Plus. Apple Pay launches at a time when the US payments marketplace is in turmoil: The frequency and scale of security breaches are on the rise, issuers are beginning their migration to chip-enabled cards, and mobile payments are still quite nascent — even after significant investment and a range of competitors that have come and gone. Enter Apple Pay.
Just as new products and services from Apple have reshaped other industries, Apple Pay will reshape and set a new benchmark in consumer payments. There are many well-designed aspects in the initial version of Apple Pay — these are the Apple Pay “hits.” They include a context-aware, streamlined user experience; a breakthrough approach to security; unprecedented payments ecosystem cooperation; and great timing.
Although there is a lot to like about Apple Pay, this ship has holes. If not addressed, these “misses” — such as an inability to scale in-person payments, limited consumer and merchant value, and reduced consumer insight for marketers — will derail Apple Pay's ability to reach the mainstream, become the undisputed commerce platform of choice, and achieve Tim Cook’s vision of replacing the wallet.
We are only three days into this chapter of mobile payments and the story is far from over. US banks and the payment networks are enthusiastic partners in Apple Pay and began actively marketing it to their customers well before the launch. European banks fear Apple Pay is a Trojan horse. Merchant reactions run the gamut from intrigue to reticence.
For more detail about Apple Pay’s hits and misses, what to expect going forward, and what it means for eBusiness and channel strategy professionals, read my new report out today. As you try Apple Pay, let me know what you think. I’d love to hear about your experience and your take on the hits and misses. Keep me posted!