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Apple Pay: A Coup in the Credit Ecosystem?


Apple Pay, the latest mobile payment system unveiled by Apple last week (Sept. 9, 2014), looks more promising product than the iPhone 6. With the announcement of most revolutionary product, Apple has injected itself into the market by turning beautiful iPhone device into credit cards. Apple Pay is expected to gain big footholds with Apple’s huge fan base.

Apple Pay is a classic example of simplification and integration with the ultimate secure payment and user experience. Apple signed up an impressive group of companies to endorse Apple Pay like Panera (PNRA), Macy’s (M) and Whole Foods (WFM) on the retail/consumer side. Apple also has the credit and debit cards from giant banks Wells Fargo (WFC), Bank of America (BOA), Capital One (COF) and JPMorgan Chase (JPM). Also the backing of the three big card networks- American Express (AXP), Visa (V) and MasterCard (MA).

An Easier Way to Pay

Just hold your iPhone near the contactless reader and with your finger on your ID Touch, that’s how simple is to pay through Apple Pay! Apple Pay made payment procedure simpler by one touch to pay with Touch ID. Apple Pay can mark a significance impression on users’ mind in coming days due to Apple’s vast market and new threats to traditional credit card networks. Apple Pay is a lot more secure than the iCloud. Security is the prime concern while dealing with online payments on personal or business transactions.

The mobile payment system “Apple Pay” will be available on iPhone 6 and iPhone 6 Plus handsets, as well as the upcoming Apple watch early next year.

The combination of biometric authentication (Touch ID Fingerprint System), GPS location data and near-field communication makes a payment process vastly more secure than the current credit card system. Let me make it simpler, while shopping every time you hold your credit/debit card to pay, your card number and identity are visible-whereas with Apple Pay you just need to fingerprint on the screen of your Apple device Touch ID.

Also transaction numbers or histories are never stored By Apple unlike the other credit/debit card issuers. But the real question is what Apple specifically can give to the four major components or so called players in the credit card world- customers, merchants, card issuers and credit card networks. Apple Pay is going to be notably discounted mobile payment system ‘card present’ interchange rate from 5 major issuers.

On the other hand two major retailers-Amazons and eBay has said no to Apple Pay so we can assume there is a long and steady way to go to capture the retail industry.

All eyes are set on the most revolutionary product which can mark a dent on credit and payment system or can change the way we use to pay through cards. But if Apple can provide compelling payment system better than the banks, I am sure it may be able to achieve a coup in the credit ecosystem.

Nile Lars is a mobile developer at Softweb Solutions.

Originally Featured on Innovation Insights