Analyst: Apple Pay’s Success Likely to Spark M-Payments with Android, HCE (Feb. 4, 2015)
Apple Pay’s arrival is a watershed event that’s generating buzz from Main Street to Wall Street and reshuffling the priorities of many payments industry participants, but its future isn’t clear yet, according to Lee Manfred, a partner with First Annapolis Consulting. In a keynote address on Feb. 3 at the Smart Card Alliance’s Payments Summit in Salt Lake City, Manfred itemized some of the achievements and uncertainties surrounding Apple Pay since its October 2014 rollout.
More than 50 payments card issuers have gone live with Apple Pay and at least 750 more are committed to do so, Manfred said. Apple Pay’s U.S. merchant acceptance locations are growing and soon will double from the original 200,000. “As recently as August 2014, NFC was considered a potentially dead payments technology, and now it’s been validated as part of a payments approach that works. It’s secure and [the Apple Pay user experience] is elegant, which was the final stumbling block we’ve solved for mobile payments.”
But Apple Pay isn’t a sure thing yet, Manfred cautioned. Acceptance at half a million POS terminals is only a fraction of the U.S.’s total of several million merchant locations and not all retailers are interested in it. “We think over the long haul, in-app payment with Apple Pay could become more important than its role at the POS,” Manfred suggested. Apple Pay’s confinement within the iOS ecosystem also leaves plenty of room for other mobile payment approaches to flower.
“Apple Pay is a huge catalyst, not only for Apple but also for Android and host card emulation (HCE),” Manfred said. He urged issuers and merchants to view Apple Pay as a tool to build their own customized mobile strategies. “We don’t believe Apple Pay as it’s currently constituted is its end game,” he said. “Like most Apple products, we believe [Apple Pay] will continue to evolve and one of the big challenges for the payments industry will be keeping up with the rate of change and development ahead.”
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