Why is Apple not solving the mobile payments problem?

Once again, I am unimpressed.  Another September Apple event, another iPhone release, and another missed opportunity to become a major player in the mobile payment space.

Apple is taking steps towards getting into the payments game, but it is not nearly enough.  Tim Cook and his team should be jumping in to the deep end of mobile payments, rather than cautiously dipping their toes.  So, what does the latest round of releases mean for Apple and its future in payments?

Fingerprints & Beacons

The iPhone 5s now features a fingerprint sensor that can be configured by the user for authentication purposes.  The sensor could be integrated into various applications beyond simply unlocking the device.  One of the more compelling use cases would be facilitating the payment process at point of sale.  Touching your thumb to the iPhone home button would be easier and less cumbersome then validation through password or PIN.

The other move Apple made that has applicability to mobile payments was with the launch of iBeacon.  Mobile devices with iOS 7 will now be equipped with iBeacon which uses Bluetooth Low Energy (BLE) technology to facilitate the transfer of data between devices.  Apple’s investment in Bluetooth heavily suggests they have abandoned Near Field Communication (NFC), which ISIS and Google Wallet largely rely on.

iBeacon might be nifty if merchants choose to adopt it.  And fingerprint authentication for validating a latté purchase is convenient.  But, we are a long way from these isolated features being connected to a holistic payment experience that users will adopt – both consumers and retailers.  So how does Apple get there?  From this vantage point, Passbook should be the glue that brings this all together.  And yet, Apple has failed to invest in their wallet app.  This lack of attention has left Passbook to linger on iPhone screens failing to provide any real value to anyone.

Strike While the Iron is Hot

Apple has a window of opportunity to win the mobile payments game.  With Google, ISIS, and other major mobile payment wallets failing to deliver, Apple is very well positioned to usurp users of these wallets and grow upon their current customer base.  With over 575 million iTunes accounts (compare this to PayPal’s 130 million accounts); Apple certainly has a solid base to build on. This is a company that has repeatedly solved consumer technology problems where others have failed and successfully transformed consumer behavior.  Apple should do what they’ve proved they can do before and deliver us a mobile payment experience that is beautiful, easy to use, and provides everyone in the ecosystem real value.

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About Kelly Martin 14 Articles
Having worked in both retail and commercial banking in the US, Kelly is passionate about product innovation in banking and payments. In her role as an Online Banking Product Manager for M&T Bank, Kelly roots her approach to product development in creating a rich and intuitive customer experience. The views and opinions expressed by Kelly are hers and in no way reflect those of M&T Bank.


  1. The iBeacon technology is positioned to completely end run all of the existing mobile payment and wallet providers. Apple will create the most compelling consumer use cases for this technology and it may not be in the retail segment first. I expect the use cases will start in the home and once the consumer is comfortable with it, they will introduce the killer in store retail experience.

  2. I think you’ve mis-judged this. Time and time again, Apple has taken a longer term view of a market place, preferring to wait and launch a genuinely better customer experience, in order to dominate and then monetise it. Think iTunes & App Store – many of the building blocks were put in place years before the full solutions went to market.
    Mobile payments in-store is still in its infancy. The interaction between a sales person and a customer works fine at the moment using credit card/chip / PIN. Even contactless doesn’t really add a huge amount (for the customer), hence it’s slow take-up. For mobile payments to disrupt it will have to overcome and better this intimate interaction between two people. Apple may be the ones to do this, PayPal and banks could also mount serious challenges. I think we’re some years away from mass-market adoption.

    • Dan,

      I do not necessarily disagree with your comments; however, Apple has a prime opportunity to provide the market with a comprehensive mobile payment experience where other market players are struggling. Apple is facing erroding market share to Android which is one argument for stepping up their game in the innovation department. By this I mean, not innovating in separate features – as Tim Cook discussed recently (http://www.businessweek.com/articles/2013-09-20/apple-ceo-tim-cooks-complete-interview-with-bloomberg-businessweek#p7), but by connecting those features to create a customer experience that is efficient and beautiful.

      I hope I am wrong and the “building blocks” that Apple is investing in will pave the way for the future of payments. However, in my humble opinion, they are risking losing the payments market as they build out separate features/functionality rather than creating a unified experience.

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