David Papp Blog

Apple Pay and the rise of the digital wallet

With the creation of innovative and practical mobile payment systems, mobile payment is becoming more accessible than ever.

Types of mobile payment
Mobile payment systems these days come in all kinds of flavors. There are those that make use of external accessories like The Square and “Tap and Go” pay systems that turn your mobile phone into a mobile wallet, where you go into a store and check out with your smartphone. Mobile payment systems that are in the latter category include Google Wallet, One Touch PayPal, and the recently launched Apple Pay.

What makes Apple Pay different?
With all the digital payment systems available out there, why is Apple Pay getting all the hype compared to the earlier released Google Wallet?

Google Wallet can be utilized on smartphones equipped with near-field communication (NFC chips). You pay by simply tapping your smartphone at a payment terminal. Essentially, Apple Pay works the same way.

However, it does have the advantage of having a more advanced security system. The iPhone 6‘s Touch ID verification system verifies your fingerprint at the same time that it approves your credit card transaction. An added layer of security is provided by its use of payment tokens – every transaction generates a new random 16-digit number instead of sending out your credit card number.

Apple also boasts that over 220,000 stores carry payment terminals where Apple Pay can be used and has mentioned global brands like Nike, McDonalds, Subway, and Toys R’ Us.

The future
Apple Pay’s hard release is scheduled for this month and already it’s been generating a great deal of buzz, which is hardly unexpected. The fact that Apple is venturing into digital wallets could spur a more widespread acceptance of mobile payments.

Maybe it’s only a matter of time before we turn into a cashless, card-less society. In the meantime, we’re just going to have to wait and see how this technology pans out and make sure you never lose your smartphone.

36 thoughts on “Apple Pay and the rise of the digital wallet”

  1. I am really excited to get an Iphone 6 and start using Apple Pay. I enjoy using services like Square– at my local coffee shop I don’t have to use my card anymore. Once I’m at the register I can just approve the charge on my square app. It doesn’t save me too much time over getting out my wallet but it’s a better experience overall.

    • This does seem quite interesting. At least it’s better than bitcoins. But I guess having everything at one place could be dangerous sometimes too. If the technology continues this way, few years down the line all we’ll ever need when we leave the house would be our smart phones. I wonder how miserable someone’s life will be if they ever lost or have their phone stolen.

  2. Considering that the NFC chip in the iPhone 6 is just dedicated to Apple Pay, I think the tapping to pay isn’t going to do much. iPhone 6 users won’t be able to buy NFC chips in bulk and use them to map certain actions for their desk, car, etc. And also, because Apple Pay is only going to be available in mostly bigger chain companies, smaller mom and pop shops won’t have the ability to accept Apple Pay payments, and because Apple Pay doesn’t adapt to that, it’s going to fail unless it either tries to support every single brick and mortar shop it can, or if it has the same method as Google Wallet where it sends out your credit card number. What would be better though is a universal credit card for Google Wallet where you can switch a faceless card to whatever card you want from an app on your phone, and then whenever the card is charged, it charges the credit card you wanted it to charge. If the card gets stolen, you can just deactivate it.

    • There is always a but, isn’t there? But yeah, you made a very valid point and something I thought of since the start… a lot stores won’t accept this as a payment and we are a long way from making this kind of payment an universal one. I must admit this might be the start of it, but most small stores won’t surely accept this kind of payment, so you will still have to carry your wallet or card around anyway.

      • But you have to remember; when credit and debit cards were first created many stores only accepted cash. Now, it’s very difficult to find places that don’t accept credit card. Businesses learn to adapt if they want to remain relevant and keep a steady income. I’m not saying that Apple Pay will be successful, because I really don’t see it becoming a big thing, but there is always change to be had if profit is to be made.

  3. I really like this idea. The security measures that are put into this payment method is really exciting. I just hope it does not become a problem, so I will wait a while until I get on board.

  4. This is awesome, the idea of using your mobile to pay everything instead of carrying a wallet and a card, but I can see how it’d be a problem if you mobile gets stolen or lost. Specially if you use Google Pay, because as far as I know the protection measures of that app aren’t that advanced, not as advanced as Apple Pay at least. I’d not risk it with Google Pay,but Apple pay does sound like a safer option!

  5. Apple just copying.. We had google wallet and isis before all that apple pay stuff. There just a bunch of biters!

    • Apple do copy more than innovate nowadays, that’s fairly well known. It is a shame, they used to be so innovative and offer fresh and original ideas but it’s been a while.

    • I do agree somewhat to your point, Apple seems to really have fallen on innovation since Steve Jobs passed. The iPhone 6 failed to bring anything really revolutionary to the table in my opinion.

      Despite this, I think Apple Pay rose out of necessity. With major concerns over credit card fraud, and no wish to hand over its massive iOS userbase to rival digital wallets like Paypal and Google wallet, Apple had to come up with its own digital wallet or lose out on both market share and income.

  6. I have so many mixed feelings about advancements on this front. Like any new technology it’s going to be vulnerable in it’s first few incarnations, and possibly forever depending on the vulnerabilities that are found and exploited. Google Wallet is no better than a credit card seeing that anyone can your phone the way they would your credit card, but Apple is improving upon this by using dual verification. I have to wonder if making these “conveniences” secure will actually prove more difficult than the systems we currently use.

  7. I don’t see the advantage of paying with a phone as opposed to a card. It’s the same amount of work to pull a phone out and verify a charge as it would to grab a card out of your wallet. However, if the smart watch trend takes off I could get behind paying for things with my wrist.

  8. I never really found that people are using Apple Pay. Is it more prevalent in America, or is it still a rising technology in all parts of the world and people are just starting to take on in large numbers?

  9. There are some serious competitors out there: Google Wallet, Amazon Payments and Paypal. What irks me is that many sites do not accept payment methods from their competitors (e.g. I cannot buy anything from Amazon from Paypal), hence I have to wire money in between banks and all these different wallets, paying transaction fees in the process.

    I have a bad feeling that Apple Pay would probably not accept other payment methods as well, meaning more transaction fees in the way. I might just close all these online wallets soon and stick with a credit card if this continues to happen.

    • I do really hope people would get over the competition and just make everything easier for their consumers. But chances are, Apple Pay wont be supporting PayPal or other Payment channel as well, since Paypal is not an option when inputting a payment method in iTunes (just my thought).

      • Sadly in such an oligopoly each side wants to maintain its market share. There is no chance that they will prioritize consumer convenience ahead of beating their competition.

        The only bridge linking all these wallets together is your credit card. But given all the leaks of credentials going on lately, it has also become quite risky in my opinion to share such details online. Perhaps a new, neutral wallet vendor might show up to fill this niche?

  10. Even the man Bill Gates himself said Apple Pay was “fantastic” and a “real contribution” to the market. The randomization feature so you never give out your credit card is just brilliant technology and especially useful when credit card and identity theft are so rampant. It’s too bad Paypal won’t be a part of Apple Pay based on some drama relating to Samsung, but it’s interesting nonetheless.

    • The randomization is a big reason why I’ll be trying out/using Apple pay. I’ve had problems with identity theft before and would like the peace of mind knowing my card info isn’t being given to the retailer each time.

  11. Wow, what a world we live in! I’ve used Google Wallet in the past (I’m more of an Android user than an iPhone one) and wasn’t too impressed by it. I imagine that the extra security will certainly be a plus to those who do use the iPhone. Though, fingerprinting isn’t always all that effective, especially on a smartphone screen. The separate numbers each time, though, is something I could certainly get behind…I’ll have to look into this more. Maybe I’ll end up becoming an iPhone fan, haha!

  12. This could be good, but bad at the same time. I really don’t see us turning completely to a cardless/cashless ect. society. There are so many people out there who can find a way to hack it. If it can be hacked, it will. Even with the finger print technology.

  13. This is actually interesting. Although this technology primarily works for credit cards, I hope that this can be used for debit cards or ATM’s as well, since only a small part of our population (in our country) avails the credit card.

    Anyway, I would really love to hear more about the Apple Pay in the following months. I might also use this if ever payment terminals will be available here in PH.

  14. I like that Apple are joining in on this technology however I do not know enough about NFC to start using it in my day to day life. It took me a while to get used to going from swiping my cards and signing a bit of paper (Still have to in some places in the world) to using a pin number to pay for items.

    I think it is good for businesses but myself as a end-user I’m not fully sure how I would adopt this right now into my life.

  15. I’m still skeptical about digital wallet things. Well – maybe not skeptical, but I can’t remember to use them. It’s still easy to just get out my payment method and do it physically.

    • I think that digital wallets would be great if you happen to forget your wallet at home. The only problem is the amount of ways that it can be exploited. But I can see for most people – especially those that have grown up with credit cards, not wanting to or not ready to switch to mobile payment systems.

  16. Technology is really making big leaps and bounds every year, isn’t it? Smartwatches, curved TVs, mobile payment options, you name it. With Apple entering the market and knowing how much buzz they seemingly can bring from their diehard customers, this could be a great thing. As far as a futuristic society doing away with cash, debit and credit cards, that’s a whole other story right there but for now, mobile payments are wonderful for convenient purchases since everyone always has their smartphone with them wherever they go and pulling out a wallet can be a hassle, especially if it deals with paying with a card.

  17. Technology and cell phones are becoming more and more useful to the people now days. I think that eventually paper money will not be available and that all funds will be electronic.

  18. Tech is finally getting there. we’re almost in a time where pockets won’t matter because everything will be packed away very neatly on our devices. I’m into the idea of companies like Google and Apple having wallets included on their phones. Things are going to be so convenient once all of the kinks are ironed out and privacy isn’t a huge risk anymore.

  19. As convenient as it is to have a digital payment method I find myself conflicted with worry. I cannot avoid the fear of having my digital payment methods stolen either through my phone or by the account being hacked. I feel much safer with physical money and credit cards but as security becomes much more robust I will be more welcoming to the idea of digital payments. Its nice to see companies competing though as that should drive the market to grow and improve.

  20. It seems like this is more secure than credit cards but everything has disadvantages. For apple pay some vulnerabilities are that if someone steals your phone they can forge your fingerprint and have access to your apple pay. Also what if your finger is sweaty and touch id can’t recognize your finger. I guess you can’t pay for the goods you just picked up. In time digital payment will get better, so i’m not worried.

  21. Great article!!! I’m so excited too about Apple Pay. I like that it’s verification process includes a fingerprint identification step. There are just too many thieves out there with access to our personal data online. But the one thing they will have a hard time accessing is our individual fingerprints. 🙂

  22. I’m waiting to see widespread adoption of this. The technology’s there – it’s just about the will to use it.

    I’m sure it will happen – we’ve just been waiting to see when people’s perceptions of cash transactions catch up with technology. The whole idea of the digital wallet has been around for years (my first memory of it in relation to a mobile phone was in the late 1990s).

    It’s taken a while for there to be traction with this, but if anyone’s going to be able to bring it to the masses, it’s going to be Apple.

  23. A wallet in a smartphone would be a really bad idea. Sure it is convenient, but if your smartphone is the latest release, it will be a target for theft. I think people will be wise enough not to put too much money in the digital wallet. What is needed is a password to use the digital wallet so that in he event of theft, at least they cannot access the money. There must also be a way to get the money of that digital wallet when the smartphone is stolen.

    • I remember seeing some technologies that help curb that effect though, such as two factor authentication (having to use a PIN), fingerprint ID, and limiting the amount of money that can be spent at once.

  24. Let us examine. Apple has recently launched the iOS8.1 and it is going to work well with Apple Pay. The sky is blue, the clouds are clear, and the hook is: tomorrow we are going toneed to go to the bank. Knowing that Apple Pay is available, we might not need to go there. Sounds like a good day for me.

  25. We are definitely moving towards a cashless society where it is becoming more and more difficult to pay in cash for your goods. Even vending machines are becoming cashless, or penniless to say. I don’t know what to think of a future society where we have become solely dependent on technology to pay for stuff. I think that paying for things with real money should always be an option, yet the way this NFC technology is developing I foresee a sad cashless and option-less society at bay.

  26. The real question is is Applepay widely used? I’ve seen and know people personally who use both Google wallet and one touch Paypal. I haven’t seen anyone using Applepay before. Maybe if it was more mainstream I’d use it, but until then I’m a little skeptical and worried about non-acceptance issues.

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