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Apple iPhone 6 launch set to impact payments but real uptake could be years away

Matthew Finnegan | Sept. 12, 2014
With the launch of Apple Pay and the near field communication (NFC) enabled iPhone 6, CEO Time Cook has promised to replace "antiquated" credit card transactions with the ability to make purchase with the swipe of a smartphone.

With the launch of Apple Pay and the near field communication (NFC) enabled iPhone 6, CEO Time Cook has promised to replace "antiquated" credit card transactions with the ability to make purchase with the swipe of a smartphone.

But while Apple, armed with card details from hundreds of millions of iTunes accounts, is arguably best placed to succeed where others have failed and convince people to ditch their wallet in favour of mobile payments, industry experts remain unconvinced of the short term impact.

"In terms of introducing a new payments device that devotees will flock to adopt, Apple has made a good start," commented TechMarketView analyst Peter Roe.

With new iPhones — and a — Apple moves on from Jobs Apple enters the mobile payments business Apple's iPhone 6 launch will be 'tipping point' for mobile payments

"However, we expect that Apple is intent on playing a longer game, with a goal of building a much bigger global m-commerce business. The facilitation of payments is a means of "keeping score" and monetising all the other elements of a transaction."

Gilles Ubaghs, Ovum senior analyst, Financial Services Technology, agrees that the Apple Pay NFC capabilities - available to US customers only on launch - will be welcomed by the more ardent Apple fans, but will not spur mainstream adoption in the near future at least.

"The overall impact on the mobile payments space in the very near term aren't really that significant," he told ComputerworldUK.

"There will be the early adopters who use it of course, but we are still a while away from the wallet being obsolete. Despite what Tim Cook says, payments aren't really broken and they work pretty well for billions of transactions a year, bar the odd data/security loss issue, which tends to be more a PR disaster than anything else."

The Apple Pay service is built into both versions of the iPhone 6 released on Tuesday, which have an NFC antenna, and will also be offered to those with earlier iPhone versions via an iOS 8 update.

Mastercard, Visa and American Express are all on board for Apple Pay, along with US banks accounting for 83 percent of credit-card purchase volume, the company said. Merchants including Sephora, Starbucks, Panera, Groupon, Staples and MLB.com have signed up to accept payments through Apple Pay by the end of the year, with more expected to come on board, the company said.

However Dave Hobday, managing director of Worldpay UK, commented that retailers outside should wait until adoption of Apple Pay ramps up before spending on systems to facilitate mobile payments.

"If the iPhone 6 lives up to the hype, it could take a whole swathe of consumers one step closer to ditching their wallets, but things won't change overnight," he said.

 

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