The idea of the smart wallet has been mooted for years but finally, with one of the largest and most successful mobile technology providers, Apply entering the arena, it looks like a major push by the giant of smart technology could give ‘smart’ payments the push it needs.
Yesterday, Apple announced that it planned to offer its own version of a mobile wallet, teaming up with retailers like Target and restaurants like McDonald’s, as well as the three major credit card companies.
Simply, it means that customers of participating retailers will soon be able to buy a Big Mac or a laundry detergent with the tap of a new Apple iPhone or a new smartwatch, also announced on Tuesday.
Mobile payments are expected to reach US$100Billion over the next 5 years according to Forester Research. Competition in the digital payments sector is intense with both technology firms, banks, credit card companies and new start-ups vying for a place.
There are a number of Irish firms in the digital payments business, including Dublin-based Realex payments, Kerry-based Monex and Stripe, founded by the Limerick based Colliston Brothers.
Apple’s solution, waving the phone, is little different from previous efforts. But Apple hopes that its promises about security, including that credit card information will not be stored on the smartphones or devices or on Apple’s servers, will convince consumers that it is safer than using a credit card.
Apple Pay will be available only on the company’s two new smartphones, the iPhone 6 and the larger iPhone 6 Plus, and the Apple Watch, a wearable computing device Apple plans to sell in 2015.
If Apple Pay can make more people use their smartphones to pay for things, it could push companies like Google, Amazon and Microsoft to reach similar deals with retailers and credit card companies, making mobile payments more widespread.
Tens of thousands of retailers in the United States, including Whole Foods Market and Macy’s, will accept it. And because of a partnership with Stripe (founded by Limerick’s Colliston Brothers), a payments processing start-up, Apple Pay can help small app developers use the service to power their transactions.
Consumers, particularly younger audiences are becoming increasingly concerned with their personal privacy across the web, which has been fuelling the rise of applications that promote privacy. Apple will need to demonstrate to users that privacy and security concerns are effectively managed.