Apple Pay: Does a Rising Tide Lift all Boats?

Parker Burke's picture
Parker Burke : Marketing Director, Media Systems

Apple’s latest technology announcement has been called a “game changer” by numerous media outlets and for a variety of reasons:

  1. Some have called the larger display and display options a breakthrough that will keep the technology giant at the top (while others have mocked the size).
  2. Many view Apple’s wearable option, the Apple Watch, as the newest industry changing device.
  3. Others see Apple Pay as the technology breakthrough that mobile payments have been waiting for to finally get consumer and retailer adoption.

Interestingly, in classic Apple fashion, none of these technologies are necessarily breakthroughs.  Samsung has been delivering large displays to the mobile phone market for a number of years.  Samsung, Qualcomm, Pebble, and others have delivered smart watches integrated into phones.  Isis (now Softcard) has offered NFC-based mobile payments to consumers on the Android and Apple (with a sleeve) product sets for the last year.  Where Apple has succeeded in the recent past is on perfecting existing technologies and it appears the iPhone 6 announcement will continue with that trend.

The announcement that peaked my interest most was clearly Apple Pay.  After years of rumors and subsequent disappointment following iPhone announcements, Apple has finally delivered an integrated mobile payments platform into the iPhone they have roped many consumers into over the years.  From the demonstration at the event, it appears to be a clean and simple product to use with broad card association (Visa, MasterCard, and American Express) and card issuer (American Express, Bank of America, CapitalOne, Chase, Citi, and Wells Fargo, with 5 more on the horizon) support.  It does not appear as though there is any high level difference from the product that Isis has offered for a number of years.  Although, as they have done with products in the past, I anticipate Apple will excel at delivering product simplicity to spur consumer adoption.

Additional reports have also confirmed that the use of the NFC hardware on the iPhones will be restricted to Apple Pay for at least a year.  It is not clear whether this restricts all use of the NFC hardware or only the payment functionality.  However, Softcard (formerly Isis) announced they are “actively working with Apple to enable Softcard on the [Apple Phone] in 2015.” Clearly, more information is still to come.

To provide consumer support for Apple Pay, convenience store retailers need to have contactless payment options at their point-of-sale and on the forecourt in their fuel dispensers.


Reaction from other payment providers

However, what immediately followed Apple’s announcement might be the actual “game changer”.  Walmart and Best Buy, key owners of the MCX platform (externally branded “CurrentC”), publicly stated that they would not support Apple Pay.  Indications point to other MCX owners also stonewalling the new mobile payments option in support of their own merchant-led coalition of many of the largest retailers in the United States.

PayPal, who has also been working to gain traction in broad retail had their own reaction in the form of a full page ad in the New York Times with a play on the recent Apple iCloud hacked celebrity pictures release: “We the People Want Our money Safer Than Our Selfies”

So, where does all of this leave us?  While in many cases “a rising tide lifts all boats”, it appears mobile payments’ biggest competitor might not be cash or consumer adoption, but mobile payments itself.

To remain up to date on the latest payment trends in the retail petroleum industry, follow Parker on Twitter – @MobileAtThePump.


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