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Why Europe will likely say 'meh' to Apple Pay

Kirk McElhearn | Sept. 29, 2014
Apple Pay will be a bigger deal in the United States than it will be in Europe and other parts of the world.

On its website, Apple touts that fact that Apple Pay will save you time, by not forcing you to search for your wallet and then find the right card. These concerns, too, are specific to the United States. On average, Europeans carry only 1.46 payment cards (more than two thirds of which are debit cards). In the US, people have more than twice as many cards; 14% of Americans had more than ten cards in 2007. Credit cards are much less common in Europe (though adoption rates vary by country), and most people only have payment cards with their banks.

The security elements of Apple Pay are impressive. As Rich Mogull has explained, the technology behind the Apple Pay process is complex and reliable, and seems a lot more secure than, say, iCloud. It's clear that, in the future, this sort of system will interest banks in Europe and other countries. But it will also meet with a lot of competition, as several companies have already planned similar systems. And, with a truly secure payment system already in place, financial institutions are less likely to be in a hurry to start giving Apple money as a payment middleman.

Apple's online payment features interest me far more. While many merchants already use two-factor authentication systems--Verified by Visa and MasterCard SecureCode--Apple's version seems more robust and much easier to use.

Adding the Apple Watch to the mix will certainly make contactless payments more useful for quick purchases: a cup of coffee, a newspaper, a pint of milk. But even then, you only gain a bit of time; it really doesn't bother me to have to reach into my wallet and take out my debit card to make a purchase. It won't eliminate the need to carry cards with you: if you want to make a purchase, and your iPhone has lost its charge, or if the store's contactless reader isn't working, you'll have to pull out the plastic. And not everyone will accept Apple's system, at least not for a while.

So, it's clear that, in the United States, where people have many cards, and where security is behind the times, Apple Pay will make a big difference. But over here in Europe, it just won't be that big a deal.


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