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

nachricht Printed speakers make the photos sound
04.05.2015 | Technische Universität Chemnitz

All articles from Communications Media >>>

The most recent press releases about innovation >>>

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

Im Focus: Basel Physicists Develop Efficient Method of Signal Transmission from Nanocomponents

Physicists have developed an innovative method that could enable the efficient use of nanocomponents in electronic circuits. To achieve this, they have developed a layout in which a nanocomponent is connected to two electrical conductors, which uncouple the electrical signal in a highly efficient manner. The scientists at the Department of Physics and the Swiss Nanoscience Institute at the University of Basel have published their results in the scientific journal “Nature Communications” together with their colleagues from ETH Zurich.

Electronic components are becoming smaller and smaller. Components measuring just a few nanometers – the size of around ten atoms – are already being produced...

Im Focus: IoT-based Advanced Automobile Parking Navigation System

Development and implementation of an advanced automobile parking navigation platform for parking services

To fulfill the requirements of the industry, PolyU researchers developed the Advanced Automobile Parking Navigation Platform, which includes smart devices,...

Im Focus: First electrical car ferry in the world in operation in Norway now

  • Siemens delivers electric propulsion system and charging stations with lithium-ion batteries charged from hydro power
  • Ferry only uses 150 kilowatt hours (kWh) per route and reduces cost of fuel by 60 percent
  • Milestone on the road to operating emission-free ferries

The world's first electrical car and passenger ferry powered by batteries has entered service in Norway. The ferry only uses 150 kWh per route, which...

Im Focus: Into the ice – RV Polarstern opens the arctic season by setting course for Spitsbergen

On Tuesday, 19 May 2015 the research icebreaker Polarstern will leave its home port in Bremerhaven, setting a course for the Arctic. Led by Dr Ilka Peeken from the Alfred Wegener Institute, Helmholtz Centre for Polar and Marine Research (AWI) a team of 53 researchers from 11 countries will investigate the effects of climate change in the Arctic, from the surface ice floes down to the seafloor.

RV Polarstern will enter the sea-ice zone north of Spitsbergen. Covering two shallow regions on their way to deeper waters, the scientists on board will focus...

Im Focus: Gel filled with nanosponges cleans up MRSA infections

Nanoengineers at the University of California, San Diego developed a gel filled with toxin-absorbing nanosponges that could lead to an effective treatment for skin and wound infections caused by MRSA (methicillin-resistant Staphylococcus aureus), an antibiotic-resistant bacteria. This "nanosponge-hydrogel" minimized the growth of skin lesions on mice infected with MRSA - without the use of antibiotics. The researchers recently published their findings online in Advanced Materials.

To make the nanosponge-hydrogel, the team mixed nanosponges, which are nanoparticles that absorb dangerous toxins produced by MRSA, E. coli and other...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

International symposium: trends in spatial analysis and modelling for a more sustainable land use

20.05.2015 | Event News

15th conference of the International Association of Colloid and Interface Scientists

18.05.2015 | Event News

EHFG 2015: Securing health in Europe. Balancing priorities, sharing responsibilities

12.05.2015 | Event News

 
Latest News

Mesoporous Particles for the Development of Drug Delivery System Safe to Human Bodies

22.05.2015 | Materials Sciences

Computing at the Speed of Light

22.05.2015 | Information Technology

Development of Gold Nanoparticles That Control Osteogenic Differentiation of Stem Cells

22.05.2015 | Materials Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>