Apple Pay paves the way

With weeks of leaks leading up to the big event, today’s Apple iPhone 6 announcement wasn’t overly surprising (except, perhaps, for the translation glitch that plagued the livestream). There’s a sexier display, a faster processor, a thinner design, a better camera, stronger glass, enhanced text messaging, lower-than-expected price points, and a lot more. Furthermore, the regular iPhone is getting a big brother in the form of the iPhone 6 Plus (I decline to use the word “phablet”). Oh, and something about a watch?
But the biggest news, to our minds, was Apple Pay, a combination of hardware, software, and services that signals Apple’s entry into the world of mobile payments. It’s coming October 2014, to the great excitement of some cash-averse Rocket Farmers.
The benefits are clear: Greater security and convenience. But what will it take to realize them?
Google started down this road years ago, with the introduction Google Wallet and the appearance of NFC in many Android phones. And yet the world is not awash in people using their phones to pay for lunch.
Will Apple’s attempt end differently? Here’s hoping. Apple has the largest market share of any device brand in the U.S., giving any move it makes a significant amount of oomph.Furthermore, its powerful partnerships with credit card companies and retailer provide a muscle that Google’s efforts have lacked.
Perhaps most importantly, however, are the 800 million credit card numbers Apple already has on file. This information gives the company a built-in, easy-to-convert audience and thus a tremendous advantage in the mobile payment arena.
Still, a few questions remain:

• Hardware: How quickly will retailers upgrade to payment terminals that accept NFC? As the U.S. begins to move towards chip-and-PIN credit and debit cards (rather than the current, wildly less secure, magnetic stripes) many retailers will be updating their payment terminals, creating an opportunity to adopt NFC technology. Will it happen fast enough to give traction to Apple’s effort?
• Reach: Right now, more than 220,000 merchants accept contactless payments, Apple said today. Big brands like Whole Foods, Walmart, Macy’s, Panera, Staples, and even Disney World are getting in on the game. It seems like an impressive scope, but really encompasses only a tiny fraction of the country’s retailers. How long will it take for the technology to make it to the corner coffee chops and the independent bookstores?
• The competition: In addition to Google Wallet, there are single-vendor options like Starbucks mobile payment system and other emerging solutions from brands like Square, PayPal, and Venmo. Sure, Apple has clout, but its ultimate victory over the competition is not yet a sure thing.
• Consumer interest: So far, there has not been a clamor for mobile payments. But the consumers of 2014 – acclimated to phone payments at Starbucks and snapping pictures of checks to deposit them into bank accounts – may be a little more ready to embrace a new mode of purchasing. Only time will tell.

So, even with Apple’s big move today, the mobile payment future is uncertain. But we can’t wait to see what happens.