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Apple Takes Over Your Wallet

Apple had a landmark product unveiling last week that’s created a tremendous amount of buzz.  Everyone on the planet is talking about it now…at least in my world.

I was at the pediatrician last week with my 5 year old and even overheard the doctors and nurses talking about the cool new “stuff” from Apple.  So, the big unveiling?  The much anticipated iPhone 6 and the iPhone 6 Plus, and the brand new Apple Watch that will even come in an 18 carat gold version.  But the biggest “reveal” was for something much less sexy than a futuristic gold watch, but in the long run likely much more powerful (and profitable) from them.  The reveal?  Apple Pay.

While Apple Pay might not sound as exciting as the new watches or phones, I believe this is the most revolutionary thing that Apple presented. Apple Pay is a service that Apple’s new products will offer which attempts to replace your need for physical credit cards, without even storing your credit card information.

They have already partnered with several of the large credit card processing companies (Visa, Mastercard and Amex) along with more than 200,000 retailers in the US so that you can pay with your watch or your phone.  You will be able to just scan your phone or watch over a device to pay and sign all with the security of using your own fingerprint. Rather than having to bring your wallet with you when you leave the house, as long as you have your Apple device you can make purchases.

On top of making it easy to purchase and sign for things in-store, Apple Pay also loads your current Apple account information into Apple Pay, so it alleviates even having to put in your credit card information initially. With almost 1 billion people already in their database the move to Apple Pay will be very simple for many. What’s interesting to me is that they are not planning to use any purchasing information from people for targeted marketing which is common with Amazon and other online retailers.

It’s also interesting that they’re partnering with the most dominant credit card companies to complete some of the functionality in what is touted to be a more secure mobile payment chain.  I was on a panel three years ago talking about how mobile payment options would soon be moving into the picture, and discussing how it would impact the current players in that market. While Apple is playing nice with credit cards and banks right now, I wouldn’t be surprised if they moved into the banking world. If Apple took on a credit card arm they would be able to earn $0.10 for each transaction. Just think of the number of people in five years who will most likely be using Apple Pay. The company would be one of the top credit card companies in the world!

In the last two to three years everyone speculated that Apple was making moves to take over the living room. With the success of Apple TV it seemed a natural progression. Instead of diving into the over-saturated market of smart TVs, though, they have instead turned a corner, making that inspirational move that we all watch for from Apple, and are instead in a relatively new market and disrupting it.  I think consumers have expected Apple to go fishing and come back with a blue marlin…instead they may have just caught a blue whale.

Bottom Line

I’m a big proponent of the Uber Economy, and I see this as yet another (huge) example of the world moving towards a more sophisticated, personalized consumer environment. By allowing people to utilize technology that they already have on hand to also make in-person payments we are removing the extra step of also carrying a credit or debit card. The next big move will have to involve the DMV. I’d love to be able to keep my driver license on my cell phone as well. Then just maybe I could really retire my 15 year old, lopsided wallet.

 

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