Apple Pay is a watershed moment that will do more to stimulate mobile commerce than the sum of all previous efforts. But it also has an impact on branding that should make it part of a broader mobile menu for banks and retailers.
Apple Pay is a recipe that has been served before. Remember Quicken from 1996 to 1998?
Back then, Intuit offered participating banks the opportunity to connect with their customers online through Intuits popular platform, for a seven-figure price.
Banks willingly paid these dollars (and welcomed the media buzz) to raise awareness and find early adopters while they developed their own Internet banking capabilities.
Shortly thereafter, once these same banks realized how much the Quicken user experience subordinated their brands and commoditized their services, they rapidly devolved their relationships with Intuit and steered consumers to their own proprietary Internet banking services.
Apple Pay could be a recipe for mutual, long-term success if the model was based on a commitment to real partnership enabling each bank and retailer to create unique experiences for their customers on a shared platform. But that is not what Tim Cook showed us.
Instead, what we saw was a "fast food" payment service that pushed the payment function into the background of a standardized consumer experience while exacting a piece of interchange from issuers. In doing so, Apple took a piece of the pie instead of growing the pie.
Apple missed the opportunity to show the makings of a "full service" experience, one where payments, ads, offers, loyalty and other value-added services are weaved into richer user experiences that grow the pie for everyone in this ecosystem.
If you believe the latter experience is worth serving your customers, then perhaps its time to think less like a "cook" and more like a "chef."
Because just like in the food business, consumers will get hooked on "fast food" payments unless banks and retailers offer better, smarter "full service" alternatives. If banks or retailers don't have their own branded mobile alternative on soon, Apple Pay stands to insert its brand in front of up to 40% of the bank's customers 30 to 50 times each month, reducing the bank or retailer's brand to just another name on a list.
Does this mean I advocate banks and retailers reject Apple Pay? Absolutely not. Apple Pay can (and will) play an important role in the migration from card- to mobile-commerce.
But there are good reasons Apple Pay should not be the only item on the menu. Banks and retailers should consider three things. First, if you think more like "chefs" and less like "cooks," you have a much better chance of creating high-value experiences that build more profitable relationships with your customers. Second, given mobile app adoption is growing 5 times faster than online services, you dont have a lot of time to come up with alternatives. And lastly, shareholders reward companies with much higher valuations when they consistently demonstrate a commitment and ability to deliver superior experiences that attract a passionate and loyal following.
Frank Liddy is vice president and general manager at Paydiant.