Enabling Technologies

Apple Pay 2.0 Brings the Value

Apple gets it. The way to make things appealing is to make them simple, convenient, and valuable for consumers. This is why couponing, loyalty, and ticketing are set to be included in Apple Pay 2.0. This next revision will bring value added services (VAS) to the masses, driving further adoption, and stimulating further innovation from other industry players.

The Apple approach

Apple is not only a creator, but also a refiner of technology. Apple, Mac, and iPhone were not the first examples of PCs or smartphones, but they were quicker, sleeker, and more desirable than the competition. Thinking about payments, Apple Pay was by no means the first near field communication (NFC) mobile payments platform, but its simplicity and use of biometrics has made it the most user friendly, giving it the best brand visibility. It is safe to assume that the same treatment will be given to VAS. This should appeal to consumers who have, for the most part, been presented with VAS solutions that deliver a less than desirable user experience and hindered their success.

The value of value

Discussions around the importance of VAS for mobile payments adoption are not new – for years Mobey Forum has been a huge advocate – yet mass consumer adoption of mobile VAS solutions has not yet been triggered. The inclusion of loyalty features will have been Apple’s plan all along, but it may have been expedited by Samsung’s predicted unveiling of Samsung Pay (following its purchase of LoopPay) that is rumoured to be launching with these services already present, and compatible with the vast majority of point of sale terminals globally, via the good old magnetic stripe.

Whatever happens, this is all a step in the right direction. Consumers can now make speedy payments with their contactless cards, but mobile payments isn’t going to find its success as a result of novelty alone. Enabling users to purge their physical wallets of a mass of plastic and derive new and unique value from mobile VAS should provide the pull the market needs to accelerate adoption.

A wider impact

Just as the initial launch of Apple Pay galvanised the rest of the industry, so too will VAS. While Apple Pay’s adoption rate will inevitably rise in line with the sales of enabled iPhones and the continued deployment of contactless terminals, VAS will give it, and the industry as a whole, a welcome booster shot in the arm.

Other handset manufacturers like Samsung are already coming to market, banks are moving ahead with more vigor than ever before and agile new start-ups are driving innovation. The impact of Samsung and other players remains to be seen; Apple Pay’s impact has already been recognized and will only increase with the introduction of VAS.

We have been talking about VAS for such a long time. I’m genuinely excited to see mass market solutions beginning to get to market. Next week Apple Pay will also have a direct competitor, which should create a market dynamic primed for rapid innovation. The next twelve months will be nothing less than fascinating.

Sirpa Nordlund

Sirpa is the Executive Director of Mobey Forum, a not-for-profit banking association.

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