Over the last decade or so, mobile payment companies have worked furiously to come up with a more secure way for consumers to do what they do best – spend money. Many of the innovations had great potential, but consumers were less than eager to jump on board and confidence about security has always been in question. Credit card payment systems haven’t changed much over the last twenty years – the classic swipe and sign is something we’ve all be accustomed to at the payment counter; but just like they transformed the music industry with the iPod, Apple is hoping to change the way we process credit card payments with Apple Pay.
One of the biggest news stories in the last week has covered all the angles of the highly anticipated roll out of the new iPhone. According to many industry experts, the way we pay is about to change with Apple Pay technology’s entry into the market. Even Rush Limbaugh spent some airtime toting the benefits of mobile technology and the possibility that the latest version from Apple could be the death knell of credit cards as we’ve come to know them.
Paypal, one of the longest running and most recognized companies in the mobile payment industry, has struggled to instill confidence in their payment platforms. Millions of consumers remain leery of wireless payments and rely solely on credit cards for noncash payments.
What’s so Different about Apple Pay?
What makes this way of paying so distinct is that a new number will be generated for each transaction. The new iPhone contains a fingerprint sensor that authorizes purchases made with a credit or debit card without swiping a card. With an embedded microchip that allows the device to be scanned at the register, all your credit card account information can be stored on the phone, in essence making the need for credit cards obsolete.
The big difference between Apple Pay and other payment systems like Google Wallet is that Apple controls both the hardware and the software. Credit card information will never be stored on the iPhone or by Apple nor will it be recorded by the merchant. In essence, Apple Pay will eliminate wide scale breaches, a concern with many other payment technologies.
Looking Ahead
Considering the success of iTunes, with an estimated 800 million credit cards on file to pay for downloaded music, the proven technical expertise and innovative designs of Apple have built tremendous trust in the brand. A future free of plastic won’t happen overnight, but the support of major card companies like Citi and American Express and large retailers that include Walgreens and Whole Foods lends credibility to the new payment option. It should surprise no one when in the near future everyone pays with a cell phone instead of a credit card.
