Sitting back watching the release of the iPhone 6 and the new Apple Watch, was both exciting and also a little frustrating (given the streaming issues). Obviously the Apple Watch was the real surprise of the day with the usual focus from Apple on providing an entirely new user experience, to a product that in essence has been on the market for quite some time.
Whilst I was quite impressed with both the new iPhone 6 and 6+, as well as the Apple Watch, my interest levels peaked at the unveiling of Apple Pay. It was rumored for some time that Apple would release their answer to mobile wallet over NFC technology, but their presentation was what I really loved.
Again it was clear that Apple was not simply looking to add yet another mobile wallet product, into a market that has already found it extremely difficult to gain consumer and business adoption.
On the surface Apple made it look like they were looking to leverage the convenience factor, by creating a product that would increase efficiency at the point of transaction. However, if you look more closely you can see that they are simply building an interface to promote a new user experience at the point of transaction. In fact efficiency, at the starting point of the transaction might be what is gained, but ultimately with the focus on user experience, the transaction just got a whole lot longer.
An example of this is; having the capability to refer back to your receipts and purchase history digitally. Whilst Apple has promised to never store your personal shopping details it never said anything about opening up the opportunity for third party applications not to (with your permission of course!). Now all of a sudden, those poorly designed spending analytics that banks are trying to sell as “value add in a digital age”, just became front and center for creative financial mobile app designers. Look how popular Mint is, and combined with the new Apple Pay functionality, the scope for them has increased 10 fold.
Another area which will add to the lifespan of the transaction is loyalty. The capability for loyalty programs to increase customer reach and spend frequency, by integrating with Apple Pay is another very interesting area for mobile application providers, to focus their innovation efforts.
I was also excited to see the security focus from Apple. The push to finally start using Passbook as an everyday application, (whilst scary for some customers) will definitely gain traction with its integration into Apple Pay.
I believe the reason mobile payments has had poor adoption to date, is because companies have been trying to use it to solve the problem of transaction processes being inefficient. Josh Silverman was quoted in a recent online article appearing on Payments Cards and Mobile as saying “The problem, is that mobile wallets don’t solve a real problem, because swiping a payment card isn’t a big imposition. It’s my opinion that the swipe isn’t especially broken,”. It’s important to note that Josh is Amex’ President of consumer products and services.
Banks and credit card companies have been researching mobile payments for years, and some have invested heavily in technology and business projects, to identify how they can capitalise on this opportunity. Again though, they focused on the tried and tested industrial revolution concept of “its all about greater processing efficiency”. They were looking to save time and money in a new age, an age that is about increasing experience in the most disruptive and innovative way possible.
By envisioning a user experience of spending, budgeting, loyalty, online shopping, convenience, security as a complete package, Apple Pay has started out on the right path to gaining the elusive consumer adoption that has plagued mobile payments to date. For reference, these areas are by no means the definitive list of what could and will be covered in the evolution of the mobile payments experience – but it’s just the start, and I can’t wait to see what’s next from both Apple and its competitors.