The FT today reports about the European operator mobile payment initiative that’s gathering a head of steam:
The UK’s largest mobile operators are preparing for the launch of Europe’s first joint mobile phone payments platform following indications that regulatory approval for the venture could come as early as this summer.
Now then, here’s a question: Is this way, way too late?
And, what precisely can the mobile operators hope to achieve when around half (or a third, whatever) of the devices they’re shipping will be completely incompatible with their m-payments system?
We all assume Apple will finally hit the market with some sort of m-commerce functionality baked into its handsets. It’s unlikely that Apple will play nicely with anyone in this regard, certainly not the operator groups.
So whilst we can expect Nokia and the various Android manufacturers to bow to the operator demands for compatibility and even offer hardware changes to support the operator-led payments system, what will the retailers support?
Apple.
However. Provided the operator payments system offers wide compatibility with existing infrastructure — like PayWave/Swipe — then there’s a good chance they will get some airtime.
Just how influential can Apple be? And what about the consumer? Which will they pick when given the choice?
It all depends on Apple. If they launch integrated NFC payments this year — in the States at least — I think they have a chance to dominate. If we see absolutely nothing from Apple this year related to payments then I think the operators will have a bit of time to think and get it right.
What do you reckon?
How would Apple launching a US only m-payment service cause them dominate European m-payments? You can’t easily dominate a market you’re not in.
Seeing as just getting standard EMV based contactless payment (of the credit card variety, let alone some clunky solution involving a phone) up and running has been a bit of an uphill battle, I don’t think any non standards based payments service has the slightest chance of success, no matter who the backer is.
Let’s say Apple does release an EMV compatible, NFC based (and therefore restricted to iPhone 5 and above) “iWallet” – it’s going to take some time for enough capable devices to be out there to make even the slightest blip compared to normal card based transactions. Worse, let’s say Apple does a Google and keeps iWallet US only* – other than the occasional tourist, it will effectively be non existent over here.
*) IMHO, it makes a lot more sense to launch not in the US but somewhere like the UK, where contactless payment has finally had some substantial roll out – assuming you’re going down the EMV compatible route
How important / influential do you think Apple is in this regard?
I would rather use a card scheme based Mobile Payment product than one from a hardware manufacturer who looks to control every aspect of your mobile life. The chances of Apple releasing a payment capability that works in Europe in their next version of iPhone is close to zero in my view.
Coupled with issues of acceptance at POS, eMoney regulatory requirements, scheme acceptance, etc etc etc.. The Apple fan bois are all going to be very disappointed when Apple do no not put NFC the phone and will all call the death knell of mobile payments because Apple have not supported it but I’m happy to say they are wrong.
As an aside, RIM have the technology to put any bank card into their mobile wallet, EMV and non EMV and make it NFC. However the likes of Vodafone and others have put RIM under a huge amount of pressure to not release this in order to favour their own solutions (of which with Vodafone is some way from being available I can assure you). Could Apple do the same? Not sure but they would be under huge pressure not to and not only from the MNO.
Always happy to update you on the world of Mobile Payments and NFC.
I’m interested in the emotional pull and influence that Apple can assert — in many other industries they have made CEOs weak at the knees resulting in rather strange market moves. Do you think we should write the company off in Europe at least in the short term? Are we all drinking far too much koolade?
If Apple were to launch a m-payment service, it’s importance would mostly be centred around the amount of press coverage that it would generate, compared to all previous efforts. An iPhone 5 with NFC and iWallet is going to generate several orders of magnitude more coverage than the Samsung Wave 578 with Orange Quick Tap ever did.
From a “how it works” point of view – Apple would have about as much influence over m-payment standards as they do around the 3G standards. I would assume they would do the same thing they originally did with the iPhone and go “World Standards first” – EMV is pretty much the world standard and even the US is slowly moving over to it, so I would expect Apple’s service to be fairly similar to Orange Quick Tap – you load the details of your Bank X credit/debit/e-cash card onto it and it will present itself as that card to a contactless payment point. Not particularly revolutionary and defiantly not Apple specific. Even if Apple release a branded e-cash card (like Orange and O2 have) that will probably come as a Mastercard/Visa card that will be loadable into non Apple devices. I just don’t see the opportunity for any form of lock in.
I think if Apple do jump aboard, it will be a case of “a rising tide floats all boats” as opposed to a case of total market domination. Though to be honest, I don’t think even Apple can propel m-payments to the big time.
We are, as you say, drinking to much kooklade. Whilst I am sure Visa and Mastercard would love Apple to come into the mobile payments market, they would only accept it on their terms and using their payment rails. I suspect If they did not, pressure would be put on the merchants to not accept them or face increase costs from the schemes (this is a guess btw, not knowledge).
I think maethorechannen and both agree on the influence Apple would have in this sphere and they need to accept international standards in payments i.e EMV.
The same could be said about video calling. Most of us had written that off as a poorly implemented and highly limited medium… At least as far as the existing mobile operator service. Then along came FaceTime.
It is possible Apple could make a few hero m-payments functions that appeal to the masses.
But then again as you rightly point out, their influence has limits.
Apple has forever been banging on about their 250ish million credit card accounts and their apparent influence over the likes of Visa. Would this get them anywhere?
Or should we be setting our attention elsewhere?
Has Apple got its sights on taking a percentage of your daily Starbucks payments? If it has, I’d expect them to be pretty expansionary given they’ve got billions to spend.
Or perhaps this is just a step too, too far for them.
Am I naive to suggest Apple may look to launch an in store payment system that doesn’t use NFC? Could devlelop a system such as Pay With Square’s that can work on any smartphone?
It’s certainly a possibility