Apple Pay: strengths, opportunities and year two

The one-year anniversary of Apple Pay’s launch is on Oct. 20. Ted Fifelski, president of mobile payments company SimplyTapp says the service's usage numbers "have taken a hit lately" (though Apple would, I suspect, beg to differ). Still, he says that the mobile payment system has lots of strengths and opportunities including:

An intuitive UX: Mobile customers want a simple platform to get in and out with a purchase as quickly as possible. Apple Pay does just that by using a functional (and still aesthetically pleasing) app design enhanced with easy-to-use biometric authentication (like finger print scanning.)

The most prolific mobile wallet to date: US$2 out of every $3 mobile dollars are transacted through Apple Pay, and the CNP solution is accepted at more than 700,000 locations. Moreover, mobile wallet developers are looking to integrate Apple Pay into their platforms because of its popularity, ease of use and familiarity. 

Fifelski says Apple Pay's "opportunities" (think weak points) are:

Mobile network dependency: Apple Pay depends on embedded hardware and antennae to work and, thus, also relies on a mobile network connection. Without phone service, users may be left without access to their accounts.  

Apple Pay or the highway: Apple Pay’s contractual agreements and costs — like the 15 basis points or .15 percent charge per transaction — have some card issuers less than enthusiastic about rolling out the solution. Without more widespread support, Apple Pay will continue to further fragment the mobile payment landscape and delay the spread and success of m-commerce. 

Moving forward Apple should look into flexible negotiations with bank, says Fifelski.

"Mobile payments go hand-in-hand with mobile banking," he says. "Financial institutions want to provide solutions their patrons are looking for, like Apple Pay, but also want to be treated as valued players in the mobile game.  Greater incentives, collaboration and flexibility among mobile wallet groups and banks will produce the best overall outcome."

Fifelski adds that Apple should "keep up the messaging."

"Since Apple Pay debuted, the messaging and promotion of it has waned," he says. "While consumers have not forgotten about mobile payments, they need to be reminded. Clearly conveying the added benefits is a must to keep adoption rates up."