September 1, 2014
Why Apple’s mobile-payments system might actually work
Despite a lot of investment and even more hype, mobile payments haven’t really taken off. While the idea of using a mobile phone or other device to quickly and securely pay for things sounds appealing, only between 3% and 7% of consumers in the US and Europe use their phones to buy coffee, books, or other physical goods in stores, according to Bain (pdf). Quartz reports.
Why? The system is still a mess. In the US, for example, no in-store mobile-payments system has reached critical mass—thanks to a complicated set of relationships between merchants, card companies, payment processors, mobile operators, handset makers, and mobile-wallet providers. Companies are so focused on claiming their share of the “value chain” that they’ve lost sight of the needs of the people who are actually supposed to be using these services. Payment providers have done such a lousy job with their early mobile products that Starbucks has emerged as a leader by simply doing its own thing.
Now Apple, which will reportedly announce its mobile payment system next week, has a chance to kickstart the market. And it might actually succeed. Because of its size, power, and—most importantly—its focus on the user, Apple is uniquely positioned to make in-store mobile payments work. Finally.
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