Apple Pay…a true digital disruption? Not at all

As by now almost everybody knows Apple has recently announced the launch of its new payments platform Apple Pay alongside with the new iPhone6. It is mailly focused on proximity payments, leveraging on the NFC technology, featuring also remote e-commerce payments solution beyond the ITunes closed loop in one ID Touch new and seamless wallet… Read more »

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As by now almost everybody knows Apple has recently announced the launch of its new payments platform Apple Pay alongside with the new iPhone6.

It is mailly focused on proximity payments, leveraging on the NFC technology, featuring also remote e-commerce payments solution beyond the ITunes closed loop in one ID Touch new and seamless wallet and user experience.

But what is, in my most important, is that Apple can leverage on a unmatchable  global scale of 800 mln Itunes wallet users to rapidly penetrate the market.

Apple will also rely to start in US on over 220k stores ready to accept the wallet, with some of the most important large chains like Mc Donalds, Starbucks, Staples  to name a few, and on some relevant on line merchant like Uber or Groupon.

In Tim Cook’s view and words this should be a revolution, a totally new experience (“so cool”) very different from current competitive offering, since current “payments are broken”.

Here is my point, is Apple Pay really new? So new to bring to a new digital revolution like what they did with ITunes for instance?

If we look at the proximity solution there is very little  innovation here. I could say zero. NFC is a pretty old technology, the embedded secure element is similar to may other examples around the world, also the One touch experience via fingerprint recognition is something that looks pretty similar to what PayPal, with Samsung,  and even the start up Venmo have already launched. Google wallet experience shows that NFC, at least in its contactless fashion, faces  strong hurdles  in significantly  breaking consumer habits and merchants barriers. So, you might be a bit disappointed, this is not a typical digital disruption from Apple. Nothing to do with what ITunes did.

Remote solution also, doesn’t bring great discontinuity vs best market practices, and PayPal is a strong incumbent to fight against. This might work more easily outside the US but the solution itself is not very different from PayPal’s easy to use experience. And other big players like Mastercard and Visa are launching their own platforms.

In a nutshell, Apple claims that the payment system is broken, but they keep relying on the same system, as PayPal does. Apple Pay works with credit and debit cards, it is just another layer, exactly like PayPal or Google wallet, between merchants and consumer using up the same 60 years old credit card schemes  system. No credit card no transaction….and PayPal is nealy 15 years old, you perhaps would expect from such a powerforce a fresher thinking…

They are just bringing together Apple ecosystem with some best practices and payments solutions, that other OTT, banks, MNO, start ups are using.

To say more, Apple Pay seriously risks to look old already next year  if HCE, the remote NFC solution where the secure element is in the cloud, will show to be successful and easier to diffuse as more open and with easy to use customer experience as well.

Any way, they have the power and the numbers, they have a huge potential user base, exceptional consumer appeal, and advertising money to spend if they want. This may be enough to change the game in the payment arena as well. I’m sure they have designed the best possible seamless user experience (replicable tough and not very far away from best competition).  But this is not a real innovation. And Apple will face tougher, better prepared competition that  in some points is ahead of them. It is not real digital disruption.

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