Apple Brands Payments!

28 MarchapplePay - Terminal Branding kit

I told you so in September.. Apple has created its own acceptance brand. Retails can now buy a decal kit on Apple’s site (ApplePay Kit). Great overview in Apple Insider this week covering merchant instruction where to put the decals “above all others” (door, register, terminal). From  I received this picture. 

Why would Visa, Mastercard and Issuers allow this!? I’m just flabbergasted. Banks pay 15bps, V/MA do 90% of the work.. and Apple creates a new acceptance brand without doing any role in the financial process?

As I predicted.. payments are not in the top 10 reasons most consumers buy a new iPhone, with only 6% of iPhone 6 customers even trying it (per the Apple insider article above).

See my long blog on the issues that this branding will cause Apple – ApplePay and Merchants (Sept 2014).

What are Banks to do? Merchants? Focus on value both individually and collectively. Payments are a brokering business.. Creating a new brand that no one can control is not a fast way toward “partnering” with either businesses or banks.

Oh.. and for goodness sake .. say a little something about this branding. Perhaps adjust the decline rate on AP relative to cards.. ?? (Apple didn’t authenticate you.. we would like to approve)

My View?

Apple’s brand will succeed in Apple’s “walled garden” Banks and merchants are well positioned to kill weeds in theirs.

5 thoughts on “Apple Brands Payments!”

  1. I get the feeling that V/MA and banks were blackmailed… I would love to know what Apple told them or threatened to do in order to get them to agree with this.

    Probably the best theory i have seen on how Apple got issuers to agree to Apple Pay is outlined here:
    http://stratechery.com/2014/apple-creates-leverage-future-apple-pay/
    It’s a relatively long piece but definitely worth the read. If anyone here can confirm or deny this please reply & let me know

  2. Not that I disagree with the sentiment, but I think it is worth noting that NFC has tried to be branded at merchants for years by V and MC (payWave & PayPass) even though in 99.9% of the cases you have acceptance by all networks. Only instance I know where the type of the card actually mattered was in a very failed trial to allow certain Citi MC PayPass cards to tap to get NYC MTA fares at certain stations or buses. And for what it is worth, I still see some Google Wallet stickers in the windows of certain stores as well.

  3. Apple Brands Payments… And now we know why – the unveiling of support for a 4th, private rail in Apple Pay to support store cards, the selection of default cards by merchant and the linking of reward cards. Finally, Apple Pay has a merchant value prop – bypass schemes and interchange.

    Couple of fascinating things about the UK launch
    – no launch support from Barclays – despite Barclaycard being a launch customer in the US. Is this the first big national player to say NO to ApplePay – i.e a strategic decision given Barclays strategic focus on payments (and the only issuer-acquirer left in the UK)? An internal rift? Or a lack of agility?
    – no signal as to whether Apple Pay will work above the current PIN less contactless limit. Would be a shame if a £600 iPhone can only be used for a £20 transaction (£30 by September)…

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