How it all started...
Then, as everything with technology it gathered a lot of dust until 2011, when Google presented Google Wallet. Google Wallet was supposed to be the game changer in the industry. It promised to store debit and credit card information directly on your phone and use the phone to pay with enable NFC receivers, slowly spreading worldwide.
The first versions of Big G's Wallet were a total disaster. The procedure was not user friendly at all, and merchants and store clerks had no idea what an NFC receiver was.
Being NFC payment an alternative method of paying with debit and credit cards, it only seemed reasonable that Mastercard and Visa wanted to get their fat wallet... fatter.
While Visa even today is behind, Mastercard developed a payment system called Paypass, a chip inside the debit and credit cards that allows you to hover the card instead of swiping it... saving about 0.1 seconds...
Furthemore, those geniuses at Mastercard thought that in order to speed up the payment process, transactions under a certain amount shouldn't require a verification, whether it was a PIN or a signature. In the past few years there have been multiple cases of stolen identities or stolen amounts from people's bank accounts. If you want to read more about RFID Skimming, click here.
Isn't it amazing how easy has it been for all these HUGE companies to screw up something that should have made our lives easier? So, instead of trying to fix it, phone manufacturers and credit card companies left this matter there, hanging.... until a month or so ago.
A Breath of Fresh Air?
Tim Cook, Apple's CEO unveiled Apple Pay (arguable name IMHO), a new attempt at root to change this industry, once and for all. Apple Pay is a digital wallet service that lets you store your cards (just like Google Wallet) to use without needing to take your wallet out. The main differences between Apple Pay and all the other services out there are:
Apple Pay does not share or store any informations about cards or their uses for purchases. The way it does this is by creating a unique single use digital token. In a nutshell, "it creates a virtual credit card with only the amount required for that specific transaction". This means that transactions are more secure because no info valuable information is shared.
The Touch ID. It might seem stupid but I really believe this is going to be the killer reason why Apple Pay will work. With a fingerprint scanner in a device you carry around every day, even if you lose your phone, you'll be the only one that can access Apple Pay.
It costs users nothing. The really good thing about this system is that it costs users absolutely nothing. Apple makes money by getting a percentage of the transaction from the merchant and from the credit card issuer.
The current situation
I have not tried myself Apple Pay, as it is only available in the US at the moment and only works with iPhone 6 and iPhone 6 Plus. It will work with Apple Watch (another arguable name) once in comes out in 2015. From what can be seen online, Apple Pay is much easier to use than the competitors out there, and this is the reason why it's getting so much hate.
When Apple Pay launched last week, it had support from some major retailers (McDonald's and Target to say a few), while it raised a lot of controversies in other big box stores (Walmart and CVS).
Even though, only 38 major retailers were fully supportive of this initiative, Apple Pay does not require a specific NFC receiver, it works with any already on the market. That's the reason why the system worked also on systems that officially did not support it. In CVS for example, customers were able to buy with Apple Pay even though it was supported. This caused merchants that did not want to support Apple Pay to start unequipping NFC receivers from all stores, causing trouble to also those customers who did not want to use the service.
The reason why so many merchants are not willing to cooperate with Apple is of course... money. They don't want to pay fees on transactions both to the banks and to Apple. This reason seems pretty legit, but the boycott serves also another purpose. Some of these stores (Walmart for example) are launching their own NFC app, called Current C. The app works similarly, but it is more complicated and more frustrating to use.
What could Apple do to prevent this?
I know it might not be classy, but I say fight fire with fire. If merchant are pulling NFC receivers from their stores, why shouldn't Apple pull their apps from the App Store? If Apple can't use it, why should anybody?
You might tell me that the problem would still be there because of Android phones, but it's not a real problem. Android's enormous market share takes into account Europe and developing countries, where Android is a winner. In the US, iPhones outnumber Android by A LOT.
If 8 out of 10 customers can't access your app, I'm pretty sure you'll think twice before poking a sleeping dog, my dear Walmart...
To the next challenge!
Apple has been known for having created some revolutionary tech gadgets in the past decade. The well know "iSeries" have created or allowed industries to grow. We could be here all day arguing whether an iPhone is better than an Android equipped phone, but it is undeniable that it has brought in the market technological advancements.
This is why Apple Pay will eventually become the standard for non cash transactions. Yes, it will take some time, and yes there will be a few doors slammed on the nose along the way, but I'm positive there will be one clear winner in the future.
If you think there's something that deserves my attention and want MY point of view, or simply want to add more to the article, let me know in the comments below!
