Brought to you by: Ibotta
It's been one year since I wrote in these pages about how Apple, with its failure to deliver NFC (near field communication) and a mobile payment product in the iPhone 5S and 5C, was going to read the last rites for mobile payment.
And sure enough, for the past 12 months, precisely nothing has happened, save for the mobile carrier's payment scheme Isis suffering a very unfortunate branding clash.
So the euphoria around the widely adopted assumption that Apple will now release a full-fledged payment system that connects the millions of credit card details stored in iTunes to the hundreds of thousands of NFC-enabled sales counters across the U.S. is understandable.
But it's not just the belated arrival of swipe-to-pay that should be setting hearts alight for brands and retailers. Commerce happens in three main spaces: physical retail, the internet and apps. Apple has been slowly (very slowly) assembling the ecosystem to own payment in each of these spaces:
Retail: Actual transactions in physical retail stores have been impossible to crack without NFC, but Apple already had Passbook to deliver easily accessible tickets and vouchers, iBeacon to activate on a hyperlocal basis perfect for retailers, and TouchID to deliver the promise of security that is the primary concern for both consumers and merchants.
Apps: iOS 8 offers Deep Links that can enable commerce in a variety of new ways that have not yet really been explored. One of the clear winners here will be social commerce. With the mobile app now by far the biggest channel for Facebook, brands will be highly incented to use it to drive clicks directly through to items in their own 'iWallet'-enabled app. Such commerce-led thinking could also lead Facebook to consider allowing click-throughs from Instagram as well.
The internet: This is the piece of the puzzle that remains least clear, but the Safari browser could emerge from the shadows to be a key player in developing mobile commerce, most of which is still web- rather than app-based. An iWallet would naturally be extended so that brands could serve one-touch secure payments from the web. This brings commerce not just to sites, but also to banners, emails and even texts. With countless new persuasive selling opportunities, we may have to rapidly redo our thinking around the traditional purchase funnel.
Brought to you by: MOO
It's in Apple's DNA not to engage in any market where it can't own the entire ecosystem, as we have seen from the App Store, iBooks and so on. But payment has proven too tough a nut to crack, with credit card schemes having a stranglehold over core payment mechanisms. A less dogmatic approach has finally resulted in reported deals with Visa, Mastercard and Amex, without a doubt including highly favorable terms in revenue share and product development exclusives.
Strategically, Apple's new flexibility around working with partners allows it to do what it does best -- provide awesome seamless experiences for consumers, while positioning its product ideally at the point where consumers are about to spend money. By attacking web, app and retail with one product, and taking a fraction off each transaction, Apply is ensuring that it can take a slice from the whole of the payment pie, which shows no signs of shrinking any time soon.
This is in marked contrast to Amazon's approach to mobile, launched with the Fire phone in July.
Amazon's approach was far too revolutionary -- as if it could use mobile to deliver a similar change in behavior as it did when it first launched the idea of shopping online. Firefly aimed to change consumer behavior by getting shoppers to scan items anywhere and have them delivered at home. But we all know that image recognition, be it for visual search, augmented reality or any other purpose, is not a natural behavior.
Amazon also missed out on the fact that around 90% of purchases are still made in-store. People don't want most of their stuff delivered to home – even if it's done by a drone.
Apple's better strategic positioning and partnership approach is very likely to result in an instant uptick in mobile payments, and will have a damaging effect on Amazon's reach into mobile -- the fastest-growing commerce channel.
This is very bad news for Amazon, whose hugely expensive development and launch of the Fire phone now looks like far too little, far too late. With only an estimated 35,000 devices sold as of the end of August, and Apple on the warpath, it's hard to see how Amazon can fight back. The mobile commerce game may well be up.