Apple Pay – Pulling teeth.

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Apple Pay problematic but better than the rest.

• Payments are horribly difficult.
• From vested interests to proprietary standards and a myriad of complexities, getting a mobile payments system to work is a herculean task.
• This is why I suspect that Apple Pay is experiencing teething problems
• Research firm Phoenix has conducted a survey that found of the people who had enrolled in Apple Pay only 59% has actually tried to use it and two thirds of those had experienced some difficulty in effecting the transaction.
• In many cases it was due to the merchant itself not being ready to support the service despite being on the list of those that are supposed to be enabled to do so.
• Other issues involved the terminal not working, the transaction taking too long and timing out and inaccuracies when the transaction was posted.
• In many cases the cashier was unable to help fix any of these problems.
• To be fair to Apple, none of these problems appear to be its fault, highlighting the problem of being dependent on operationally much weaker partners.
• This combined with weaknesses in how the banks authenticate cards added to the iPhone are all causing the service to underperform the magical experience promised by Apple.
• I suspect that these problems will eventually be ironed out but it will take a long time as the payment industry is slow moving at best.
• This gives the alternative offerings more of a chance but they are in far worse shape than Apple Pay.
• For example, Google Wallet has been around for a number of years but the user experience is so bad that it has never gained any traction.
• Very like 2009 where every man and his dog created an app. store, now every man and his dog are creating payment services.
• Almost all of them are likely to fail badly.
• These services are extremely difficult to get right as one has to line up the entire payment chain from device to merchant to processor to bank.
• Furthermore this all has to be linked with very secure, very robust, easy and fun to use software.
• When it comes to fixing all of the back end systems and getting all of the different players on board, the alternative offerings are all miles behind Apple Pay.
• Consequently, I think that Apple Pay will get it right long before any of the alternatives do, meaning that its position as the payment provider to iOS users is pretty safe.
• Although Apple has 40% market share in the US, its global average is much lower at around 16.5% meaning that more than 80% of the mobile payment opportunity will still be on the table even when Apple gets it right.
• I continue to see Apple Pay as a catalyst that stimulates the payment opportunity for others rather than something that takes over the world.
• Hence, I see big opportunities for other players but progress to date is going to make them followers rather than leaders.
• Microsoft and Google remain my favoured ways to gain exposure to the digital and mobile ecosystem.