Interesting piece from Seeking Alpha (reg-wall):
Once paying for purchases at retail with a smartphone becomes commonplace, regardless of whether you believe Apple will roll out its own AppleCard, the credit card companies will fall one by one, starting with American Express. How can it possibly be prestigious to carry a Platinum or Black card when the card never leaves your wallet? Is it worth $300 or more per year when mostly what you’re paying for is a string of numbers punched into a smartphone that no one will ever see? As plastic credit cards disappear, which will accelerate with adoption, the ubiquitous Visa, MasterCard and American Express logos at retail establishments will be supplanted, and only one symbol will remain – a very large Apple.
Not sure the credit card companies “will fall”. Even without the “prestige” that comes along with showing off your black card, there are still plenty of differentiators: Air miles, cash back, concierge services, just to name a few. But that small part of business culture, pulling out a gold, platinum, or black credit card, will no doubt fall to the change brought by the acceptance of NFC.
A side point: I wonder who thought of Apple Pay in the first place. Was this inherited from Steve Jobs? The idea might have evolved from the iTunes/iPhone disruption model, but I don’t recall ever seeing Apple Pay attributed to Steve. Doesn’t sound like Jony either.
I think Apple Pay is a phenomenal business idea. Just wondering if this is Tim’s brainchild.
I could see Apple coming out with their own debit-style “card” with lower transaction fees and direct debit from checking accounts. I’m thinking the “revolving credit” game is a little too deep for Apple to get into seriously.
But think carefully. The iTunes Store has been around for over a decade and we still don’t have “Apple Records” (not the Beatles one, obviously).
I’m not sure about the prestige factor going by the wayside. The prestige is a thing that is felt by the user herself when she wields the card. It is a momentary rush of self-congratulations, a feeling of membership in some (mostly fictional) elite. The face of the card is still very visible when using Apple Pay, and on the iPhone 6/6+ it is nearly life-sized. I would bet that this element of branding was insisted upon by the card companies, who don’t want to be reduced to an unrecognizable string of text in a list.
A membership can be completely unseen (i.e. secret society) and people still seek it
The prestige of any given card died a long time ago. Gold cards used to be the prestige color until everyone was using it. Then it was Platinum, then black.
When my bank reissued my credit card last month (thank you, Home Depot), they changed the color scheme to all black. That should tell you how “elite” that color is.
We are at the point where no style of card signals anything about the user except what bank they use.
Yep. Amex black card requires a minimum spend of $250k a year and offers 24/7 concierge service. Nobody rolling that high gives a crap about the “prestige” of the card. You also need to flash the card to get the travel perks, like airport lounge access and rental card upgrades, regardless of how you pay. People pay for the perks, not the prestige.
As for who thought of Apple Pay, chip and PIN has been in use in Europe for a decade. The more important question is: who brainstormed its implementation in Apple Pay? Previous systems, like Google Wallet and chip-and-PIN cards, rely solely on NFC. Apple Pay ties together Passbook, Touch ID, and NFC. Who figured out how to bring those elements together and decided to lay the groundwork two years ago?
Seeking Alpha is almost always wrong.
I don’t see this happening any time soon.
How can it possibly be prestigious to carry a Platinum or Black card when the card never leaves your wallet?
It won’t be.
But nobody’s trying to impress the cashier at Best Buy or Safeway with a Centurion Card anyway; those aren’t for everyday purchases, and ApplePay isn’t for When You Need To Spend $25,000 On A Card.
The kind of things you do use those for, if you’re That Kind Of Person, are big luxury expenses (fancy food, fancy stuff, buying a new car because you can) – and I’m pretty sure ApplePay isn’t going to be taking over the Mercedes dealer anytime soon.
Chip-and-PIN relies solely on NFC?
Nope.
Many if not most Chip-and-PIN cards use physical electrical contact, not contactless systems, that are used by sliding them into the reader.
For what it’s worth, discussions between Apple and Authentec, the company they acquired for TouchID, started in ‘Late in 2011’ (timeline here http://1.usa.gov/1zANVop). Presumably, some form of payments solution was the goal all along.
Clearly, doing payment wasn’t his idea. How to do it is a different story.
Tim Cook’s record suggests that he would have allowed the person behind the implementation of Apple Pay to lead the introductory presentation, if it was one of senior executives. The fact that Cook introduced this himself suggests that it was either his brainchild, a team effort or conceived by a still low level engineer.
Insofar as visibility, Seeking Alpha seems to think that credit card companies are made up of ignorant folks. Not so. Amex cares about marketing to consumers, not retailers. They know what they are getting into.
Really? Well, that is… actually fantastic. For weeks, Europeans have been bragging about being ahead of the game with their chip-and-PIN cards, but you’re saying those cards are not contactless, which we’ve had in the U.S. for years. Delightful.
Looking at my Canadian Debit and CC, the pins definitely have physical wear on them that extends from the edge of the card to the chip.
not the same thing. If you’ve never been to europe or anywhere else that uses chip+pin, it’s actually significantly more convenient to slide your card in punch in pin and that’s it. there’s no hand to cashier/swipe, wait for approval, sign a piece of paper, hand it back to the cashier wait for receipt. the cashier isn’t involved in the transaction really at all, they simply hand you what you’re buying and you handle the rest. the point is security. the cashier never sees your card, they don’t need to. the fact that you know the pin is the signature/card verification.
and anyway, do you think places in europe don’t have NFC payment systems in place…….? have you ever been out of the US? you should try it some time. you’d be amazed at how far behind the US is in nearly every possible way.
“ApplePay isn’t for When You Need To Spend $25,000 On A Card.”
you realize that ApplePay simply links a card to an NFC transmission to a terminal right? I would (and do) use ApplePay for anything that i would otherwise use a credit card for, and has NFC available.
A) I don’t usually show my card to the cashier now, except Costco because it’s also my membership card. Most of my cc payments are slide and done, followed by slide and sign.
B) I’m just responding to Sigivald on that. I thought Europe was way ahead on NFC. He says NFC isn’t the majority. Take it up with him.
Having been pushed to research Sigivald’s claim, I looked into chip-and-PIN and discovered it is not even related to contactless payment.
http://www.lowcards.com/chip-pin-credit-card-technology-24939
Apparently chip-and-PIN is ahead on security but still uses a physical reader like magnetic stripes. It has no connection to RFID used in NFC contactless payment. RFID can be added to your chip-and-PIN like it is added to mag stripe cards, but it’s not part of the system. My fault for trusting Europeans to know how their shit works.
until Apple decides to become a bank the comoanies will be there. all this is changing is how we work with our accounts.
in a way we do have “apple records” because musicians can release their own stuff via itunes. the catch is that Apple does nothing in terms of marketing etc. they merely distribute what they are asked under the terms set by the artist.
and Apple is no more likely to become a bank than they have a cell phone service, ISP etc
credit card fraud has been around for a while so I suspect that the base idea of “wouldnt it be great if we could combat fraud by helping to create a more secure ‘card'” was Steve. Some of the how it was done was probably Steve like perhaps the idea of using fingerprints which lead to buying the company they did in 2011. Some of the other details would have been Tim having grown from prior discussions etc