Meanwhile, Apple Pay

apple-moneyRemember when Apple brought sexy back? Well, they’re trading some of it back and buying into a revenue stream that’s not best defined as ‘sexy’.

Payment processing.

In the last few days Apple has generated a ton of discussion. More than usual even. Funny how a string of calculated announcements by the most well known company in the world will do that. As we all know, Apple has turned self-promotion into a science. But does any of this year’s new hardware represent a noteworthy new chapter to the Apple story?

I don’t think so.

But that’s not to say that this doesn’t have the potential to be an extremely noteworthy year for the company.

Apple makes good looking products. Hardware and software. For the most part, the company has relied on stark and simple means to sell their own well-designed aesthetics. Sex sells, right? Just show some nice curves, play some trendy music and call it a day!

The company’s latest push suggests that their products are ‘getting even smaller’. The next few months promise Apple’s first smart watches and almost-unbelievably razor thin new laptops. But the company is getting much smaller than this, intangible even. Let’s not forget their bid to take over transactional payment processing: Apple Pay.

In my opinion, this is the company’s most noteworthy new endeavor in the past three years. It’s not even a close race (sorry Apple Watch!).

The Apple Story does tend to focus upon sexy new products and packaging (Remember: this ‘packaging’ including the company’s own internally-developed marketing and in-house marketing agency). Design standards is certainly the side of the story that we’ve been focusing on this week.

But their Story is also about unexpected pivots, moving into new markets and even creating their own. They were the first to successfully sell the world on a touch screen. They convinced us that a household could benefit from a tablet device. And even before all that, who would have guessed that Apple was going to redefine the music industry?

As a market innovator (and even a market creatorApple Pay is the company’s newest juggernaut. At least, they certainly hope it will be. In fact, it’s jarring just how assertively their out to conquer payment processing. They’ve outsourced their marketing to as many partners as possible. It feels a bit out of character.

Payment processing.

Sexy, right?


Apple is certainly trying to make Apple Pay look stylish. It’s a unique marketing challenge for the company: generating excitement for something most consumers aren’t immediately attracted to. Most consumers don’t pay attention to which payment processor they use. It’s the same dilemma faced by credit card issuers for years. Just ask Capital One.

Capital One has been screaming “What’s in your Wallet?!” to deaf ears for years. For all their effort, many of their customers still don’t even know they’re Capital One customers. Meanwhile, Apple typically relies on its devoted brand advocates. A typically Apple consumer knows exactly what phone is in their pocket. But, three years from now, will consumers care about what brand of ‘digital wallet’ they utilize? One thing’s for sure: the Apple Pay venture will take much more of a push to reach the masses than something as inherently playful and aesthetically destinct as an iPod.

So it really should be no surprise that, while we’ve all been talking about another year of even thinner laptops, just about every major bank/credit card has its own targeted Apple Pay marketing push. Remember, as you were watching announcements about the new hardware, these were the sponsored ads.

Apple understand the revenue potential to be found in the minutia of payment processing. Their isn’t much data to work with yet, so we can only speculate how much revenue is on the table for the company. Safe to say that they’re banking on sky-high digital dollars. Stay tuned.

We’ll be back after these messages:

Apple Pay Development

Digital-Wallet-Just like how your office has gone (mostly) paperless, your wallet may soon go ‘plasticless’ as well. Slowly but surely, credit cards and IDs are being replaced by apps. Of course, like the paperless movement, this migration will likely be a slower process than advertised. That said, innovations such as Apple Pay are paving the way assertively.

Apple Pay is essentially a digital wallet. The application stores your credit card data and can be accessed with a touch, utilizing fingerprint Touch ID. You can send payments, check your private data, or even simply flash your phone across an Apple Pay enabled checkout reader. You’ll even be able to use your Touch ID fingerprint to pay within apps. The video below provides some great visual examples.

Passbooks, an app that stores tickets, coupons, boarding passes and essentially any items with a barcode, is a helpful tool in its own right. Seamlessly adding Apple Pay’s functionalities with those offered by Passbooks’ makes for quite a package of services. Indeed, these offerings, taken together, open the door to leaving the home without the wallet.

Of course, there are two major drawbacks to a digital wallet. The first concern of these concerns is the issue of limited battery life. But this problem may be mitigated sooner than expected due to some amazing new innovations that will allow your cell phone battery to charge in three minutes or less. And, if reports are accurate, this new battery will help your phone hold its charge longer as well.

Ok, great. It’s convenient. But what about security, the second major drawback to consider.

Apple Pay uses tokenization, which essentially replaces your actual credit card number with a randomly generated number every time you use it at a new retail or online establishment. That new number can be configured to expire after one transaction or made specific to a certain type of transaction (like Uber fares, let’s say). Which means that when data breaches occur like the ones Target and Home Depot experienced recently, you’re safe. There’s no credit card info to steal and reuse.

This also removes a huge burden from sellers – and developers :).  Since a person’s credit card number never even enter a POS or online payment system, they don’t have to worry about storing credit card info–which can potentially be hacked and stolen. It still won’t be perfect, but instances during which you feel the need for a physical wallet may be less common than we’d expect.

In short, it’s not at all unreasonable to look at Apple Pay as a major step towards the future of transactional commerce. It might not be long before we add our physical wallets to the long list of ‘items replaced by our cell phone’. This transition is going to be interesting to watch. And there will continue to be hiccups along the way. But developers will continue to prove that we can safely walk out the door with only a cell phone weighing down our pockets (or purses).

Maybe our keys are next?