The Highs and Lows of Apple Inc. (NASDAQ:AAPL)’s Apple Pay


Apple (NASDAQ:AAPL) has been a pioneer of several innovations in the tech world. Apple (NASDAQ:AAPL) has launched their new iPod and iPad with several latent features that made them into huge hits. Apple Pay (NASDAQ:AAPL) is Apple (NASDAQ:AAPL)’s new accomplishment and most retailers are looking to adapt this method of payment. Apple Pay (NASDAQ:AAPL) is quite a significant application, but has a few glitches which are discussed below.

How exactly a mobile wallet functions:

  • Mobile wallet keeps track of all customer payment cards, coupons etc. customers can link mobile wallet with various sources of payment and use them when customer needs to pay for a purchase.
  • The retailers have an inbuilt system designed to receive payments from mobile wallets. The information is exchanged between the two mediums and transaction takes place.

Many companies like Google (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), SoftCard sponsored by Verizon (NYSE: VZ), AT&T (NYSE: T), PayPal and T-Mobile (NYSE: TMUS) have mobile wallet facility available for their customers but it hasn’t gained popularity.

Apple Pay will let customers pay their bills with their mobiles and thumb prints. Apple (NASDAQ:AAPL)’s new Apple watch can be used for payments too, provided it is linked to an iPhone.

The success of mobile wallet partially depends on how readily retailers adapt to it. Urging the retailers to make necessary changes in their hardware and software in order to facilitate mobile wallet will be challenging. Customer adaptability to mobile wallet can’t be established at this point as other similar apps launched by other companies didn’t receive much notice.

Third party wallets and its disadvantage:

The biggest obstacle in the way of mobile wallets is that retailers have nothing to gain out of it and therefore they are not too keen on adopting the change. Retailers will lose the face to face relationship with their customers. Apple (NASDAQ:AAPL) will have to come up with a plan which will be beneficiary to both the customers as well as retailers in order to make Apple Pay successful.

Mobile payment options:

Retailers have two options as far as customer relation is concerned, they can either stand alone or use an embedded platform. Starbucks is an example of standing alone. Starbucks introduced its wallet a long time ago therefore it had no choice but to stand alone. The Starbucks team came up with a wallet by interfacing with credit and debit cards to fund the wallet. This method was a huge success for Starbucks and enhanced customer relation.

Another option is to use an embedded platform like Paydiant. This method allows retailers to build mobile payments along with other offers into their own apps and still hold a control over customer relation.

Apple (NASDAQ:AAPL) could have taken up the second option if it hadn’t already announced its refusal in making business out of retailer’s data and customer behavior. Apple (NASDAQ:AAPL) so far has no interest in adopting an embedded platform and it remains to be seen if Apple (NASDAQ:AAPL) will be successful in its new venture.