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 New Technologies for A/V Analysis and Search
13.04.2017 | Fraunhofer-Institut für Digitale Medientechnologie IDMT

nachricht On patrol in social networks
25.01.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO

All articles from Communications Media >>>

The most recent press releases about innovation >>>

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

Im Focus: Nanoparticles help with malaria diagnosis – new rapid test in development

The WHO reports an estimated 429,000 malaria deaths each year. The disease mostly affects tropical and subtropical regions and in particular the African continent. The Fraunhofer Institute for Silicate Research ISC teamed up with the Fraunhofer Institute for Molecular Biology and Applied Ecology IME and the Institute of Tropical Medicine at the University of Tübingen for a new test method to detect malaria parasites in blood. The idea of the research project “NanoFRET” is to develop a highly sensitive and reliable rapid diagnostic test so that patient treatment can begin as early as possible.

Malaria is caused by parasites transmitted by mosquito bite. The most dangerous form of malaria is malaria tropica. Left untreated, it is fatal in most cases....

Im Focus: A “cosmic snake” reveals the structure of remote galaxies

The formation of stars in distant galaxies is still largely unexplored. For the first time, astron-omers at the University of Geneva have now been able to closely observe a star system six billion light-years away. In doing so, they are confirming earlier simulations made by the University of Zurich. One special effect is made possible by the multiple reflections of images that run through the cosmos like a snake.

Today, astronomers have a pretty accurate idea of how stars were formed in the recent cosmic past. But do these laws also apply to older galaxies? For around a...

Im Focus: Visual intelligence is not the same as IQ

Just because someone is smart and well-motivated doesn't mean he or she can learn the visual skills needed to excel at tasks like matching fingerprints, interpreting medical X-rays, keeping track of aircraft on radar displays or forensic face matching.

That is the implication of a new study which shows for the first time that there is a broad range of differences in people's visual ability and that these...

Im Focus: Novel Nano-CT device creates high-resolution 3D-X-rays of tiny velvet worm legs

Computer Tomography (CT) is a standard procedure in hospitals, but so far, the technology has not been suitable for imaging extremely small objects. In PNAS, a team from the Technical University of Munich (TUM) describes a Nano-CT device that creates three-dimensional x-ray images at resolutions up to 100 nanometers. The first test application: Together with colleagues from the University of Kassel and Helmholtz-Zentrum Geesthacht the researchers analyzed the locomotory system of a velvet worm.

During a CT analysis, the object under investigation is x-rayed and a detector measures the respective amount of radiation absorbed from various angles....

Im Focus: Researchers Develop Data Bus for Quantum Computer

The quantum world is fragile; error correction codes are needed to protect the information stored in a quantum object from the deteriorating effects of noise. Quantum physicists in Innsbruck have developed a protocol to pass quantum information between differently encoded building blocks of a future quantum computer, such as processors and memories. Scientists may use this protocol in the future to build a data bus for quantum computers. The researchers have published their work in the journal Nature Communications.

Future quantum computers will be able to solve problems where conventional computers fail today. We are still far away from any large-scale implementation,...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Ecology Across Borders: International conference brings together 1,500 ecologists

15.11.2017 | Event News

Road into laboratory: Users discuss biaxial fatigue-testing for car and truck wheel

15.11.2017 | Event News

#Berlin5GWeek: The right network for Industry 4.0

30.10.2017 | Event News

 
Latest News

UCLA engineers use deep learning to reconstruct holograms and improve optical microscopy

22.11.2017 | Medical Engineering

Watching atoms move in hybrid perovskite crystals reveals clues to improving solar cells

22.11.2017 | Materials Sciences

New study points the way to therapy for rare cancer that targets the young

22.11.2017 | Health and Medicine

VideoLinks
B2B-VideoLinks
More VideoLinks >>>