TRY FOR FREE

Banks and Apple Pay: The Love-Hate Relationship

The widely adopted Apple Pay is a controversial topic that has not been left aside whenever mobile payments solutions are discussed. Without a doubt, Apple Pay can be considered as a game changer that is pushing ahead contactless payments. However, there are different sides to the story depending on the party. The consumer perception of Apple Pay may differ from that of the banking industry that is actively deploying the solution since the moment it was launched. Along with all the advantages that Apple Pay offers to its users, there are costs of convenience absorbed by the banks. Banks are now facing the controversial question of consumer demand on one side and hidden rocks it has to cover on the other. That tendency creates love-hate relationships between the banking industry and a payment solution.

In order to have a holistic view of what drives those relationships and why banks are forced to get along with Apple Pay, let us start from the beginning: how it became possible for mobile payments solutions to take over other methods, and then turn to Apple Pay’s dilemma.

Smartphone Revolution

Over the past few years, the smartphone revolution brought to consumers a new way of shopping and payments. As mobile become an immense part of the consumers’ life, they are turning to their phones to get a majority of things done. There is a certain shift in expectations brought by the leaders of mobile technology and mobile payments. According to the Pew Research Center study US Smartphone Use in 2015, 64% of American adults own a smartphone. Below is a chart provided by Pew Research Center on the ways smartphone owners use their device.

As we can see, smartphones serve a wide range of needs. An impressive 57% of smartphone users using online banking drove banks online as well as shifted the industry’s focus from branches to improving the online experience. In order to stay relevant, businesses have to follow customers and improve the ch ...

To continue reading, sign up for MEDICI Inner Circle and get free access for 30 days.
100,000+ FinTech professionals trust MEDICI Inner Circle to stay up to date on the latest in financial services.

RECOMMENDED