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  • Morgan Stanley: Apple Pay is the Mobile Payment Solution "to Beat"


    Although Apple Pay hasn’t even been made available to consumers, investment firm Morgan Stanley expects that the mobile payment solution will become the industry standard that will help push wider adoption of NFC-based payment systems. Researcher Craig Hettenbach recently issued a blue paper to investors in which he analyzed the effect Apple Pay may have on the mobile payments industry when it launches later this month. According to Hettenbach, the large install base of iOS users coupled with its existing infrastructure should allow Apple Pay to gain traction quickly.

    He continued by writing the following regarding the matter:

    By reducing fraud, improving data security, and increasing credit/debit volumes for issuers and networks, while protecting the value of the existing payments value chain, we believe Apple Pay has a high chance of success. Apple's market share in the U.S., its exposure to a relatively affluent demographic, and the ease of use along with a unique form factor (Apple Watch) position Apple Pay as the player to beat in the mobile wallet space.
    The high expectations which are being set for Apple Pay differ from other payment services such as Google Wallet which has seemingly failed to catch on with consumers in a meaningful way. Hettenbach had the following to say regarding the matter:

    Most other players looking to launch mobile wallets have either struggled with making the package sufficiently cost effective/attractive for merchants (PayPal, Square, Google Wallet) or sufficiently intuitive and convenient for the consumer (Isis/SoftCard, other telco wallets). We think Apple may have solved both problems in one application.
    One of the key factors that is seen to lead to the success of Apple Pay is its compatibility with the existing payment structure. In particular, Apple Pay is set to allow users to make payments with bank cards from existing issuers and use tokenization services from card networks to user data. The system is also set to integrate with existing NFC mobile payment infrastructure which is also compatible with the EMV (Europay, MasterCard and visa) standard for chip cards. As of right now, the major US credit card companies are also set to transition to secure EMV payment systems. Furthermore, the established NFC payment systems which are already in place, Apple’s adoption of the technology in both its iPhone 6 lineup and the upcoming Apple Watch should help accelerate the adoption of NFC-technologies. According to Hettenbach, 50% of payment terminals will have NFC capabilities by October 2015.

    We’ll have to wait and see if the analyst’s expectations and research has led to the correct hypothesis but all of the points made do seem valid. How do you feel about Apple Pay? Is it something you are excited to start using upon its release?

    Source: Morgan Stanley via AppleInsider
    This article was originally published in forum thread: Morgan Stanley: Apple Pay is the Mobile Payment Solution "to Beat" started by Akshay Masand View original post