Thursday, 11 September 2014

Apple Bank?

Is Apple going to be your next bank?

It would have seemed a strange question but not any longer. One of the most revolutionary announcements about the iPhone 6 was that it included NFC (Near Field Communications) and they (Apple) had created a payment system that could allow you to use you mobile phone to buy stuff.

This has been done before Google Wallet promised mobile payments some time ago. Microsoft have had NFC and wallet functions in their phones for a while but nothing has cracked the mobile payment process. The reason, in my view, is that all the players in the space want to be THE mobile payment system rather than A mobile payment system. Online payment processing giant PayPal wanted to be master of the space. Mobile phone companies wanted to lock payment systems to your phone number or SIM and get cash. The banks wanted to be kingpins too.

On top of that was cost. All of the players wanted to charge a lot of cash for relatively small transactions. Small retailers will often set minimum purchase values to justify accepting card payments. Contactless payment is almost all 'micro payment' with no room for high cost. If you charge 16p to a retailer for a payment when the item is a £1.00 then retailers would be made to do it. Its got to be fractions of a penny.

Electronic money has never happened not because of technology but because of banking greed.

Apple have a reported 800 million credit card numbers they use to pay for their products. They are big enough to get banks and the credit card companies to co-operate. If they are really successful is it really too far a jump to see Apple becoming a sort of 'ebank' in which iphone owners ditch their wallets and just rely on their mobile as their daily cash!

Or will it be Bitcoin. The Bank of England is now treating this seriously. Five years from now actual cash may be something that is a memory for most of us!


Link; Apple Pay