Sunday, February 21, 2016

Apple Pay: The new digital wallet

Apple has recently introduced Apple Pay to the United States. Apple Pay is a digital wallet, as well as a mobile payment service. It uses Near Field Communication (NFC) to transmit wireless between their Apple IOS devices and payment terminals.  

The first point this article focused on was how with the possession of Apple Pay, consumers would be able to download their credit card information to their phones through the use of the iTunes store. By allowing consumers to not worry about always having a credit card on them but rather just their phone, the convenience of shopping is made easier. Although Apple Pay is more convenient for customers, it is hurting financial institutions. Banks are worried about their relationships with their customers as well as ensuring that their bank and card becomes/stays the most used card. Seeing as banks do not want to lose their edge to Apple, many are deciding to join the digital wallet world. Going off of this, my last point references towards the end of the article which talked about how a lot of banks are following in Apples footsteps. For example, JPMorgan Chase is actually coming out with something similar in mid 2016. It is said that Chase will be caught up to where Apple Pay is now within a mere two years. Along with Chase, Wells Fargo is also planning on coming out with Android Pay.

My first concern that I think Apple may have overlooked was customer adoption. In order for shoppers to actual consider using Apple Pay, they must purchase an iPhone 6 as well as look for retailers who support NFC terminals, which is inconvenient. My second concern with this was stability. Apple Pay sounds like a good idea, but if millions of people start to use it will Apple be able to keep up and scale? Also, how long does it take for a transaction to process? Have they worked out all the flaws or will customers be disappointed when transactions are not processing? To continue, my last concern was regarding online shopping. Yes Apple Pay allows shoppers to purchase apps as well as physical merchandise from stores with NFC terminals, but online shopping is not included with Apple Pay. I think this is going to hurt Apple since the majority of people I know currently shop mostly online. Apple should consider online shopping for the future if they want to be as successful as they potentially can be. 


  1. I really enjoyed reading your blog. I am interested in learning more about Apple Pay and what it holds for the future, and you made multiple thought-provoking points. I like that you voiced your concerns about Apple Pay, because I had not thought of a lot of those possibilities before reading this blog. I am also wondering if Apple will be able to keep up with the magnitude that Apple Pay will become. What I do not entirely understand is the competition between Apple and financial institutions, like JP Morgan which you mentioned. Can you only use certain banks’ credit/debit cards with Apple Pay? Wouldn’t that still mean that you were using your bank, but just not always using a tangible credit card? I think that customers would still have the same relationships with their banks because I find that people tend to have certain loyalties to a bank that they use and like, but maybe they will make less trips to the physical bank. My main concern with Apple Pay is the level of security that comes with putting all of my credit card information onto my cellphone. What is Apple doing to increase security for users of Apple Pay? It seems like it would be easier to steal someone’s identity/credit card information if all of their information was on their phone.

  2. I think that Apple Pay is a great innovation for Apple. Like you mentioned, it increases convenience and enables people to leave their wallet at home and only carry their phones, bearing that their bank allows for their cards to be compatible and the merchant has a near-field-communication reader that allows you to pay. As of right now it does not drastically increase convenience because not every merchant accepts Apple Pay so you have to carry your wallet as well. The biggest benefit is that it increases security because it generates a virtual credit card number that is only valid for that purchase. It doesn't give your credit card number to the merchant which can increase security. I think the next thing that Apple has to do is enable you to use the same technology online where a random credit card number is generated to increase security. I think it is a great innovation by Apple and as soon as all merchants have Apple Pay and every credit card is compatible you will see Apple Pay and the like eliminating the need for a physical wallet.


Note: Only a member of this blog may post a comment.