When Apple Pay entered the crowded payments market, many were skeptical about its future. Now the service is quickly changing the way retailers handle transactions and consumers pay for in-store products. Find out how Apple’s presence in the financial industry is revolutionizing the payments ecosystem and what you should expect from the company in the next few years.
Fueling Growth Through Financial Partnerships and Collaborations
During its infancy, businesses were concerned with Apple’s interest in exclusively collaborating with large financial institutions, not knowing it was gearing up for mass support. To date, the company has formed numerous strategic partnerships with over 100 leading banks and credit unions. Roughly 700 applications have been submitted and are waiting for approval.
Many expect Apple to continue expanding its payments services to both urban and rural regions. Participating Apple Pay merchants benefit from the collaboration by allowing more diverse payments options. Partnering with the widely popular brand can also help win over new customers who are looking for matching promotions with their favorite stores and products.
Mobile Payments is the Future
The retail and financial industry is being disrupted and Apple has positioned itself in the middle of the transformation with the release of Apple Pay. Based on Capgemini’s World Payments Report 2014, the global industry is expected to grow by 60.8 percent through 2015.
Apple’s entry into the mobile payments space was smooth and low risk. With an array of newly release products (iPhone 6, iPhone 6 Plus, iPad Air 2 and iPad mini 3) equipped to pay via Near Field Communication (NFC) terminals, users always have the option to perform wireless transactions.
When it comes to security, the company has taken the initiative to implement a handful of safety measures such as encryption, Touch ID fingerprint recognition and the traditional passcode. In some cases, bank authorization is required during the credit or debit card linking process. Apple is also an early adopter of tokenization, which ensures sensitive payments data is never stored in mobile devices or in the company’s servers.
The tech giant’s presence in the mobile financial sector will likely promote healthy competition between other large payments companies, forcing the release of better, more refined products designed to dethrone the Apple Pay app. Analysts expect the rivalry to come from Samsung’s Samsung Pay and Google’s Android Pay.
The Apple Watch and Wearables
Smartphones started the mobile payments revolution, but the shift is slowly moving away from handheld devices to wearables. The company’s highly anticipated Apple Watch is already designed to handle contactless transactions and will no doubt further increase the adoptability of its payments app. Unlike mobile payments, the nascent wearables industry is filled with different products, ranging from fitness gear and patches to smartwatches and digital jewelry. Some wearable companies have announced plans to integrate their products with payments capabilities that directly compete with Apple Pay.
For Apple Pay to dominate the wearables space, the company could possibly release other products in addition to the Apple Watch to better suit the needs of various lifestyles.
Article via rmagazine.com