More Updates on Apple Pay and Mobile Payments

More Updates on Apple Pay and Mobile Payments
Posted: May 11, 2016
Comments: 0
Author: Paul Castner

Last week we posted an article on The Payments Review (TPR) about the evolution of Apple Pay that cited statistics showing that the number of users who try Apple Pay at the point of sale (POS) is increasing, but that as a POS payment alternative to cash or a card swipe, it has been slow to catch on.  However, in app purchases, according to the TPR article, is where the action is for Apple Pay and it is seeing the biggest gains in usage and transactions. 

Since the article appeared in TPR, more updates about Apple Pay and mobile payments were published in CFO Magazine. Apple’s CEO Tim Cook said at the company’s second-quarter earnings call that Apple Pay transactions were up 5 times versus a year ago and that it was also gaining one million users per week. Very positive trends.  The CFO article also provided insights from the Federal Reserve Board of Governors’ March 2016 study of mobile financial services.  The results of the study show that the mobile payments industry is still young and that the market is still working out its issues.  Vincent Ryan, the author of the CFO article, says that “in no way, shape, or form is paying for goods by mobile phone becoming mainstream consumer behavior.”

Remember when a brilliant young technology entrepreneur named Jeff Bezos introduced Amazon as an ecommerce book retailer back in 1994?  If you recall, it was slow to take off, did not turn a profit for years, and then had to survive the dot-com bubble burst.  Many investors and pundits were quick to say it would never catch on.  Interestingly, selling books was just a starting point for Amazon and Bezos' ultimate vision was to become the largest ecommerce or online retailer in the world.  The book business was an entry point and a chance to learn.  Once he figured out his online strategy, marketing, warehousing, product supply chain, customer service, delivery systems, etc., for the book business, he would apply that knowledge and system to other products like music and movies.  He has delivered on his vision.  Changing the attitudes and behaviors of consumers is an expensive undertaking that doesn't happen overnight.  Mobile payments will also require continuous product and technology improvements to one day emerge as the payment method of choice by consumers.

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