Friday, October 17, 2014

THE WHOLE SCOOP ON THE APPLE PAY MONDAY LAUNCH


From his lips to your ears. It’s official. Tim Cook, Apple CEO, said that Apple Pay with be released on Monday (Oct. 20) along with the iOS 8.1 update.

Apple Pay will be available on the new iPhone 6 and 6 Plus via Passbook and the service will also work on the new iPad Air 2 and iPad Mini 3 devices, which were unveiled today at the special event held at the Apple campus in Cupertino.

“We think it is going to be profound. It’s going to change the way we pay for things,” said Cook.

Apple says that the new service is safe and secure because it utilizes tokenization and strips away any vulnerabilities, instead of transmitting credit card numbers and security codes.

Cook made sure to note that “It’s easy, it’s secure and yes, it’s a private way to pay for things.”

Since the company already lets about 800 million+ users buy music, books and applications via iTunes (which is linked to a credit card), expanding to mobile payments seemed like a natural and feasible shift for Apple.

But the way that Apple did it surprised many – digitizing the existing payments ecosystem.

Apple’s initial launch partners included:

-       Navy Federal Credit Union

-       USAA

-       PNC

-       Citi

-       Bank of America

-       Capital One

-       Wells Fargo

-       American Express

-       US Bank

-       Barclaycard 

But since the Apple introduction in September, 500 additional banks have committed to integrating with Apple Pay by early 2015. 

With that, Apple Pay was also able to persuade in-store (and in app) retailers to support the service.

In addition to its launch merchant partners, some of the recent in-store supporters to sign are:

-          Free People

-          Sports Authority

-          Footaction

-          Champs

-          Wegmans

-          American Eagle Outfitters

-          Office Depot 

Preorders for the new iPad Air 2 and the iPad Mini 3, both starting at $399, will start on Friday (Oct. 17) and will incorporate Touch ID and Apple Pay technology for which will allow users to make purchases from their device more seamlessly through applications for online shopping.

Although the rumored larger iPad was not released.  the iPad Air 2 is a bit more retailer friendly. It’s thinner (18 percent thinner, measuring 6.1 millimeters), has a longer battery life (10 hours) and weighs less than one pound. It also has much stronger anti-glare capabilities courtesy of an antireflective coating. That’s good for reading in the sun, but even better for store associates working beneath florescent retail lighting.

From a consumer perspective, Apple is counting on all of those tablet shoppers (of which there are increasing numbers – 4 out of every 5 tablet owners use it to shop) to be motivated by a faster, convenient andsecure in app shopping experience, which, of course, they hope will stimulate more merchant demand.

Digital wallets are nothing new but have struggled to gain traction. Google Wallet launched in 2011 as a way to eliminate consumer credit cards, loyalty cards and coupons and instead have them stored in a Google Wallet app on their Android phone. It was sort of a great idea that went nowhere, a year after launch Google Wallet still only worked with one credit card and bank combination that only worked on one wireless network, Sprint. Today, Google Wallet still struggles to gain traction, although the launch of Apple Pay has started a race to enable the Android ecosystem with a digital payments “wallet.”

Never a first mover, Apple tends refrain from launching new technologies until it can determine a path to reinvention. While the current Apple Pay payment method mirrors what consumers do today at the point of sale, with their phone substituting for a card, there are aspects of the holistic experience that are innovative – the tokenization protocol upon which it is built, its voice activated payments option and use of biometrics to trigger payments.

Sandeep Sharma

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