At Apple’s latest product unveiling, people might have oohed and aahed over the bigger iPhone 6 screens and the Apple Watch, but the big story was undoubtedly Apple Pay. It, more than anything else announced that morning, has the potential to be a real game changer.
We’ve already devoted space to Apple Pay here, here and here, with the general consensus of our own pundits and others in the industry that it will finally give mobile payments the boost it desperately needs. But it’s not without its detractors, including an executive from American Express.
Josh Silverman, the company’s president of consumer products and services, acknowledged his company’s lack of success in the mobile payments space but also cast doubt over the entire market during a speech in front of investors. Saying that the credit card ‘swipe’ isn’t broken, he argued that merchants aren’t willing to invest in point-of-sale (PoS) terminals and consumers don’t want to deal with payment apps.
Tell that to Starbucks, which has had huge success with its payment app, and to Square, PayPal, Amazon, Google and Softcard (formerly Isis Wallet). Even with Apple’s big entrance on the scene, these other payment options won’t simply vanish, although don’t be surprised by potential consolidation.
Apple, which has already pre-sold more than 4 million iPhone 6 and iPhone 6 Plus units (a new record), will instead bring serious cred to mobile payments and show millions of users that while they might expend the same level of effort as swiping a credit card, it’s far from the same thing in terms of security, fraud, privacy and ease of use.
Even as Silverman was throwing cold water on mobile payments in general, his company showed why it’s been in business for more than 150 years as American Express cards will join Apple Pay alongside Visa, MasterCard and other issuers comprising the vast majority of credit card transaction volume in the U.S.
Credit cards may not disappear anytime soon, but if Apple Pay – which hides credit card and other personal information from merchants – takes off as expected, plastic in your wallet may soon become extinct. And what about that venerable institution American Express, which helped pioneer credit cards and whose cards rack up the most charges worldwide?
Considering the company started out in the mail business in the 1800s, it knows a thing or two about evolving and keeping up with the times. But maybe instead of its executives badmouthing new payment methods it should do more to embrace them, which would go a long way to attracting Millennials – many of whom don’t have any credit cards – and others who want payments to be as simple as cash.