Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Strategic Analysis: Apple enters the mobile payment market with iPay

03.09.2014

"In the next five years, this race will change marketing to end-customers more than it has been changed in the preceding 40 years" predicts Key Pousttchi.

According to various sources, Apple plans to introduce a comprehensive m-payment solution with the iPhone 6 and signed respective agreements with Mastercard, VISA and American Express. What is the background and what will be the impact? Five questions to Dr. Key Pousttchi, Head of wi-mobile Research Group at the University of Augsburg.

How will iPay look like?

Pousttchi: Apple will probably support both iBeacons (on Bluetooth basis) and NFC (Near Field Communication). Apple stores in the U.S. already use Bluetooth-only solutions. However, in stationary retail, Apple will not yet be able to bypass existing business processes of brick-and-mortar stores and their payment service providers. Thus, there will be an NFC transaction at the check-out: The customer touches the card terminal with his phone and then confirms the payment on his device, for instance by fingerprint.

... more about:
»Analysis »Apple »Express »Facebook »NFC »Strategic »activities »iPhone »race

Where will Apple m-payments be accepted?

Pousttchi: In theory, anywhere you can already pay with Mastercard, VISA or American Express. In practice, you need to have a card terminal which is enabled for contactless transactions.

What changes for the merchant?

Pousttchi: At first glance, there is no change, it is a regular credit card transaction to him – the phone behaves just like a contactless credit card. As a result, the merchant neither controls whether his customers will be able to pay with the iPhone nor will he get more data than before. In the mid-term, Apple will offer according value-added services to retailers based on iBeacons. We hear the first names of U.S. retailers who might be involved.

Up to now, all m-payment services in Europe and North America failed. How are the prospects of Apple for a market breakthrough?

Pousttchi: As for usability, we might assume that Apple makes no mistakes, especially as they benefit from the situation of being the only player who controls the device, the operating system and the secure element at the same time and need no rotten compromises here. As for the value network, they just rely on the existing credit card ecosystem. Although iOS might have a lot less users than Android, these users represent a very interesting target group for many merchants. It is a niche solution, but a cross-sectional and smooth one – if no real blunders come up, the prospects are very good.

Why is Apple moving in this direction and what will be the impact to the market?

Pousttchi: Short-term, there will be no changes except maybe Apple earning some loose money from transaction fees and some fancy new services in the premises of one retailer or the other.

However, remember that the real game is about customer data – the currency of the future. Real-world payment data is the most interesting single source of information Apple and others do not yet have about its customers.
It all boils down to the race for extending their market power from the virtual to the real world. If you have enough cross-sectional customer data to analyze them with the new Big Data techniques, you can be the first point of contact for your customers for anything they need or want to know – even before they know that they need it. Then, you might serve as an intermediary between the customer and any kind of merchant or service provider.

In the next five years, this race will change marketing to end-customers more than it has been changed in the preceding 40 years. Apple fired the starter's gun, and Google, Facebook, eBay/PayPal and Amazon are ready to participate.

 
Profile:
Dr. Key Pousttchi is an Associate Professor at the Business School, University of Augsburg. As an m-business pioneer, he founded the wi-mobile Research Group in 2001 and is active in research and practice of mobile financial services for more than 12 years now. Among other activities, he developed the Mobile Payment Reference Model and headed the National Roundtable of German Mobile Operators and Banks as well as the Canadian Roundtable and Think Tank on Mobile Payment and Banking. His new book "Megatrend Mobile – how smart phones will really change our world" will be published in 2015.

 
Press Contact:
Dr. Key Pousttchi
wi-mobile Research Group
University of Augsburg
86135 Augsburg, Germany
Phone +49 (177) 6319508
key.pousttchi@wi-mobile.de

Weitere Informationen:

http://www.wi-mobile.org

Klaus P. Prem | idw - Informationsdienst Wissenschaft

Further reports about: Analysis Apple Express Facebook NFC Strategic activities iPhone race

More articles from Communications Media:

nachricht Communication is Key for Responsible Research and Innovation
10.07.2015 | Hochschule Rhein-Waal

nachricht Researcher identify secure, anonymous, easy way to pay for online content
13.05.2015 | Universität Luxemburg - Université du Luxembourg

All articles from Communications Media >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Hubble survey unlocks clues to star birth in neighboring galaxy

In a survey of NASA's Hubble Space Telescope images of 2,753 young, blue star clusters in the neighboring Andromeda galaxy (M31), astronomers have found that M31 and our own galaxy have a similar percentage of newborn stars based on mass.

By nailing down what percentage of stars have a particular mass within a cluster, or the Initial Mass Function (IMF), scientists can better interpret the light...

Im Focus: Fraunhofer ISE Develops Highly Compact Inverter for Uninterruptible Power Supplies

Silicon Carbide Components Enable Efficiency of 98.7 percent

Researchers at the Fraunhofer Institute for Solar Energy Systems ISE have developed a highly compact and efficient inverter for use in uninterruptible power...

Im Focus: How wind sculpted Earth's largest dust deposit

China's Loess Plateau was formed by wind alternately depositing dust or removing dust over the last 2.6 million years, according to a new report from University of Arizona geoscientists. The study is the first to explain how the steep-fronted plateau formed.

China's Loess Plateau was formed by wind alternately depositing dust or removing dust over the last 2.6 million years, according to a new report from...

Im Focus: An engineered surface unsticks sticky water droplets

The leaves of the lotus flower, and other natural surfaces that repel water and dirt, have been the model for many types of engineered liquid-repelling surfaces. As slippery as these surfaces are, however, tiny water droplets still stick to them. Now, Penn State researchers have developed nano/micro-textured, highly slippery surfaces able to outperform these naturally inspired coatings, particularly when the water is a vapor or tiny droplets.

Enhancing the mobility of liquid droplets on rough surfaces could improve condensation heat transfer for power-plant heat exchangers, create more efficient...

Im Focus: Increasingly severe disturbances weaken world's temperate forests

Longer, more severe, and hotter droughts and a myriad of other threats, including diseases and more extensive and severe wildfires, are threatening to transform some of the world's temperate forests, a new study published in Science has found. Without informed management, some forests could convert to shrublands or grasslands within the coming decades.

"While we have been trying to manage for resilience of 20th century conditions, we realize now that we must prepare for transformations and attempt to ease...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Together - Work - Experience

03.09.2015 | Event News

Networking conference in Heidelberg for outstanding mathematicians and computer scientists

20.08.2015 | Event News

Scientists meet in Münster for the world’s largest Chitin und Chitosan Conference

20.08.2015 | Event News

 
Latest News

Ion implanted, co-annealed, screen-printed 21% efficient n-PERT solar cells with a bifaciality >97%

04.09.2015 | Power and Electrical Engineering

Casting of SiSiC: new perspectives for chemical and plant engineering

04.09.2015 | Machine Engineering

Extremely thin ceramic components made possible by extrusion

04.09.2015 | Materials Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>