An Apple a day keeps Retailers away

Recently Walmart and other retailers announced that they would not be supporting Apple Pay. (for more details, read here) This is a trend which is likely to increase for multiple reasons.Firstly, retailers have realized that in many cases, they will have to shoulder the burden of the credit card fees, which will rise rapidly once Apple Pay gets prevalent. Financial Institutions may be all for Apple Pay , because it increases the average ticket size of credit card transactions. However Retailers are coming up with an alternative payment model(CurrentC) with no fees whatsoever.

Equally important, which may not be a concern for retailers and customers currently, is that Apple will have an overreaching presence in terms of data collection across retail channels and financial instruments. This means that there will be a lot of data about purchase patterns and individual retail habits, both of which could become part of a retail analytics package provided by Apple (though this would be different from their retail focus model). However whats important is how safe that data is. Apple has been pretty lacklustre when it comes to protecting users and data (multiple instances abound of people getting hacked or Apple being ridiculously easy to bypass through social engineering). Such an important collection of data would require Apple to invest heavily in security and data encryption, neither of which it seems to be doing currently.

Last but not the least, retailers need to keep in mind that Apple accounts for only a small percentage of the overall market share of smartphones. Thus it makes more sense for mid level and mass retailers to focus on platform agnostic solutions rather than stick to Apple Pay. Ideally their current approach of designing a mobile payment app, solves both the issue of payment fees and reduces data worries.

From a user perspective, Apple Pay has limited value if the number of retailers endorsing it are few in number. It may be a great user experience but what with most smaller outlets thinking twice about the associated costs and major chains endorsing CurrentC , it may end up on the lines of the early Mobile money products.


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