Mobile payments has always sounded cool. It’s fun for consumers, refreshing for merchants and a chance for new players like mobile operators to get a piece of the action – what’s not to like? But the industry is horribly fragmented and has been locked in a ‘battle of the business model’ for years - the old versus the new, the disruptors and the incumbents. It’s a mess that hasn’t been helped by constant uncertainty over technologies, security and standards. Worst of all, the user’s voice has become silent in a debate that has degenerated into a conversation of self-interest – focused on the ‘how’ rather than the ‘why’.
As a result the mobile payments industry has been in the doldrums for a while. The various protagonists simply bobbing in the water, going nowhere – without even a breath of fresh air. They were starting to get nervous, vulnerable to pirate attack, with Apple and a handful of others flying the skull and cross bones – but hang on, don’t pirates need wind as well?
Now, finally, Apple has declared its hand and, like a teacher entering a rebellious classroom, has reminded everyone why they are there in the first place – to serve the consumer. Apple has reminded everyone that mobile payments isn’t about mobile payments at all, it’s about mobile selling. As we all know too well, payments is easy. If someone wants to buy something they will always find a way to pay. What is harder is getting people to want to buy in the first place – and that’s what Apple does best.
Everyone expected Apple to be a disruptor – renouncing NFC, trashing secure elements, fighting the card brands - go their own way. But instead they did the opposite. They embraced the standards, took the best bits and created a hybrid approach and built an ecosystem that leaves the issuers and schemes to do what they do best. Rather than disrupt they took the helm and raised the sail.
Their hope is that they get the credit they deserve, that branding rights fall their way. As cards give way to phones the branding real estate for payments is up for grabs for the first time in decades and Apple wants that spot – that’s why it’s called Apple Pay, not iPay. Will it work? Well, they obviously have lots of assets on their side – end-end control of the experience, iTunes customer base, global presence and great security so they are in with a good shot. But what’s perhaps most important in the end is that they have an amazing community of 3rd party developers and those folks have barely got started.
Remember, payments is easy, selling is not – put on your life vest and stand by for an innovation typhoon that will redefine what it means to buy.