Apple Pay: A new trade war has broken out in America, this time around payments via phones.
The new player that has shaken up the relatively new market is none other than Apple. On October 20, it introduced Apple Pay, its own payment system via the iPhone 6 mobile phones.
The mobile payments market has been a hot topic for tech titans and big retailers for years. The size of the U.S. market may be tiny at $4.9 billion compared to the $4.8 trillion credit card market, but it could reach $90 billion by the end of 2017, according to a Forrester forecast. More importantly, mobile payments will help companies better understand consumer habits, reduce store lines, pay lower fees to credit card companies, and ultimately increase profits.
Big names
The players already active in the mobile market are big names, but so far their products have not been very successful. These include Google, PayPal, the CurrentC system that will start operating in 2015 and is supported by giants such as Walmart, Best Buy, Gap, Target and other companies. There is also the Softcard application of telecommunications companies Verizon, T-Mobile and AT&T. Apple's entry into the market is progressing very well, according to a report in the New York Times, which has alarmed its rivals. What Apple's system brings with it is mainly the company's brand name and its reputation for managing to revolutionize every market it enters, if it has not already created it itself, as happened with tablets. According to the NYT, the problem with CurrentC, a mobile app that would allow users to link it directly to their debit card, but not their credit card, is that it won't be available until 2015. Companies like Walmart and Best Buy, which want to cut their credit card fees, have said they won't accept Apple Pay because they have signed exclusive deals with CurrentC. But for now, they're probably stuck. If Apple Pay is a success, CurrentC members will lose out on a lot of potential transactions. Merchants could face customer anger over not being able to use Apple's system, and, more importantly, if Apple Pay catches on, consumers may not want to use CurrentC, the NYT reported.
From the point of view of retail companies, CurrentC offers significant advantages, such as the ability to monitor customer spending habits across all stores that accept CurrentC, data that credit card companies have been exploiting to date. However, CurrentC also has disadvantages, as it is more difficult to use than Apple Pay, which allows you to pay without even touching your phone, unlike CurrentC, which requires you to open the relevant app.
Source: kathimerini.gr
