Is Apple Pay the Future?

The mobile wallet service industry is heating up with competition between one top-dog and a few other firms – kind of like the NBA’s Western conference. In this case, the Golden State Warriors would be Apple’s new mobile payment service, Apple Pay.

Although the payment system is only a small part of the company’s portfolio, Apple Pay has generated a couple billion dollars of revenue and is changing the dynamics of mobile payments. According to Apple’s website, Near Field Communication (NFC) is used in conjunction with the iPhone’s Touch ID to process payments.

Already, Apple Pay has dominated the industry; Apple’s virtual transaction service has accounted for two-thirds of all American mobile payments. Whole Foods has seen mobile payments increase by 400 percent since it integrated Apple Pay, and the service represents 80 percent of smartphone transactions at Panera Bread. What makes Apple Pay different from Google Wallet or LoopPay, Samsung’s mobile payment service, is its innovative product integration. The Apple ecosystem of devices and services is one of the biggest parts of its value to consumers. Google, on the other hand, has not successfully integrated a mobile payment service into its Android operating system.

It is clear that Apple Pay has the advantage over its competitors and will continue to thrive as more and more retailers opt-in to the service. The opportunity is great for Apple because there is not a third-party firm developing an exceptional app in the mobile payment area. I believe that consumers will be incentivized to use Apple Pay to greatly lower the risk of credit card fraud, since the service requires the user’s fingerprint to complete transactions. In addition, Apple Pay offers the possibility of incorporating coupons into its service, eliminating the hassle of holding paper coupons. As technology revolutionizes, Apple Pay has the potential to make the simple task of checking-out simpler.

-- Jonathan Wang