Community

Note to Consumer: Carry a plastic card. Actually, also carry cash. Well, don't forget your leather wallet either. Note to Merchant: Buy NFC contactless terminal. Actually, don't throw away your contact terminal. Well, you must also retain your cash drawer.

I struggle to see where is the innovation in all this.

But let me assume that it’s there somewhere because it has an Apple label on it. While worst case scenario shouldn't stifle innovation, a smartphone running out of battery is a fairly common scenario. Especially if battery guzzlers like data and GPS need to be kept on for Apple Pay to work.

Apple Pay will hopefully drive many plastic-using iPhone customers to upgrade to iPhone 6 and try out mobile payments. Only time will tell whether it will have any effect on the other 70-80% of smartphone users who don’t use iPhone.

@HariS:

Apple is the Acquirer only for sales on Apple Stores, iTunes and AppStore, not everywhere that ApplePay is likely to be used. Otherwise, how can it claim “Apple doesn’t know what you bought, where you bought it, or how much you paid.”?

I read this comment on this NYT article (http://dealbook.nytimes.com/2014/09/11/banks-did-it-apples-way-in-payments-by-mobile) saying "...Apple is offered a lower rate only ... on Apple purchases and not ... Macy's or McDonald's, etc.". That seems to make a lot of sense.

On second thoughts, how can Apple make money from acquiring fees when it has said, “Apple doesn’t know what you bought, where you bought it, or how much you paid.”? As Ron Shevlin points out in his comment here (http://snarketing2dot0.com/2014/09/15/apple-pays-critical-success-metric/), "I guess the networks will tell Apple you paid $5 for something when you really paid $500"!

Time to "Weve goodbye"?!

@PaulV: M-PESA is a fiasco even in India (https://www.finextra.com/blogs/Fullblog.aspx?blogid=9273). IMHO, it will work only where banks are not interested in the market it caters to.

On Twitter, "Follower" is a good thing!

@CraigK: Good point about "Then how could the EMV Bank-card Issuer ... authorize a transaction from an iPhone user that simply took a photo of a card (not necessarily their own)...". Your question would sound even more ominous when we learn from Apple's website that users can "simply type" card details "manually" to add new cards to Apple Pay (http://www.apple.com/iphone-6/apple-pay/). In other words, you don't even need to have somebody else's card to snap a picture of it!

@BrettK: TY for your reply. The Bank Innovation article does explain the security / transaction aspect of Apple Pay well but it doesn't answer my basic question about how transaction value is linked to the cardholder. Not sure how Apple can claim that it doesn't know anything about the purchase transaction if, as you say, the purchase value "is displayed on Apple Pay" If, as it claims, Apple doesn't know anything about the transaction, most specifically the transaction value, how will it know whether it's getting a 20 bps or any rebate on the transaction at all? I read a comment on this NYT article (http://dealbook.nytimes.com/2014/09/11/banks-did-it-apples-way-in-payments-by-mobile) saying "...Apple is offered a lower rate only ... on Apple purchases and not ... any other merchant that Apple Pay would be used (i.e. Macy's or McDonald's)". Thought it made a lot of sense given the context.

Here's an interesting story in NYT about how colleagues used a green apple to signal JPMC's CFO that she could start talking about the bank's involvement in Apple Pay during a financial conference in NYC, as the Apple keynote was still in progress in Cupertino:  

http://dealbook.nytimes.com/2014/09/11/banks-did-it-apples-way-in-payments-by-mobile

@JohnC: TY for your comment. In many parts of the world, it requires a LOT of cash to just buy an iPhone 6, so we'll see... :)

@RG: As things stand, Apple Pay will NOT provide customer identity to merchant.  

@BrettK:

Apple Pay seems to do a lot more than other mobile wallets e.g. tokenization, no need to open app, etc. (as highlighted in my post https://www.finextra.com/blogs/fullblog.aspx?blogid=9924). All this needs to happen within a few seconds so that the instore queue doesn't slow down. This requires some amount of computing power. Is it possible that this is available only on iPhone6? If so, this could be another reason why it took Apple this long.

On another note, under the good old plastic + paper regime, I sign the chargeslip which bears the purchase amount. Old fashioned as it might be, this provides the cardholder with adequate proof of the transaction value, which she can use to contest discrepancy, if any, in the credit card statement. Any idea how a similar trace is established digitally in the case of an NFC-contactless transaction? If this is a part of the dynamically created payment number, then my point about Apple Pay calling for greater computing power could make even more sense.