7 Lessons of Apple Pay's First Full Month

Published November 26, 2014 10:01 AM

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Updated October 20, 2016 10:03 AM

1 Min Read

Customers compare an Apple Inc. iPhone 6, left, and iPhone 6 plus during the sales launch at an Apple store in Palo Alto, California, U.S., on Friday, Sept. 19, 2014. Apple Inc.'s stores attracted long lines of shoppers for the debut of the latest iPhones, indicating healthy demand for the bigger-screen smartphones. The larger iPhone 6 Plus is already selling out at some stores across the U.S. Photographer: David Paul Morris/Bloomberg

David Paul Morris/Bloomberg

Apple Pay launched in late October, facing a few early hiccups and an unclear future. But in the month of November, Apple's strategy began to come into focus even as competitors closed in. (Image: Bloomberg News)

Call center operators

Customer Service Matters

Banks should expect a spike in customer service inquiries related to Apple Pay activation, advises Vikram Parekh, assistant vice president of credit cards product management with USAA, one of the first issuers to enable Apple Pay. For example, if banks handle Apple Pay activation by phone, call centers should be prepared for the additional volume. (Imaget: iStock)

Tim Cook, chief executive officer of Apple Inc., unveils the iPhone 6 and iPhone 6 Plus during a product announcement at Flint Center in Cupertino, California, U.S., on Tuesday, Sept. 9, 2014. Apple Inc. unveiled redesigned iPhones with bigger screens, overhauling its top-selling product in an event that gives the clearest sign yet of the company's product direction under Cook. Photographer: David Paul Morris/Bloomberg *** Local Caption *** Tim Cook

David Paul Morris/Bloomberg

Keep It Simple

Many mobile wallet makers have packed their apps with store locators, offers, rewards and other tools to entice consumers to use the wallet to pay. Apple has none of these features, relying instead on its sheer marketing muscle to sway consumers. (Image: Bloomberg News)

Wolfe, Daniel

Competition Intensifies

Other mobile wallet providers took the spotlight following Apple Pay's launch. The CurrentC wallet made headlines after some of its merchant supporters blocked Apple transactions, and the newly rebranded Softcard began a series of ads with a mascot based on a payment terminal (pictured).

Employee Titus Green assembles a recycled Apple Inc. iPhone at a Green Citizen recycling facility in Burlingame, California, U.S., on Thursday, Dec. 6, 2012. Green Citizen collects and disposes old electronics in the San Francisco Bay area, tracking everything to ensure the gadgets are recycled back into raw material, or refurbished and resold. Photographer: David Paul Morris/Bloomberg *** Local Caption *** Titus Green

David Paul Morris/Bloomberg

Fix It Fast

There are often unexpected issues with technology, and Apple Pay is no exception. After Bank of America customers reported being double-billed for Apple Pay purchases, the companies quickly worked to resolve the issue. (Image: Bloomberg News)

Close-up of business contract with pen at workplace on background of office workers interacting

One Size Does Not Fit All

About 500 banks and credit unions signed up for Apple Pay when it launched, but many are still on the fence. At issue is the "one-sided agreement" that makes issuers forgo some interchange revenue from payments made through Apple's mobile wallet and the fear that Apple may demand a bigger cut when the contract comes up for renewal. (Image: iStock)

A customer sets up his thumb print security lock on an Apple Inc. iPhone 5s at a Reliance Digital store, a subsidiary of Reliance Industries Ltd., in New Delhi, India, on Saturday, Nov. 2, 2013. Reliance Communications Ltd. is the first Indian carrier to sell Apples iPhone with a service contract. Reliance will offer customers the iPhone 5S and 5C a two-year contract with bundled data services. Photographer: Prashanth Vishwanathan/Bloomberg

Prashanth Vishwanathan/Bloomberg

Security Can Be Stealthy

Consumers know about the TouchID fingerprint sensor used in Apple Pay transactions, but there is much more security under the hood. Apple Pay adds EMV and tokenization, requiring no extra effort on the part of the consumer but providing a significant boost in security. (image: Bloomberg News)

A Long Road Ahead

Apple Pay's partners are reporting early adoption, but not all of the news was positive. Toys R Us, which has long supported PayPal and Google Wallet, reports limited use of Apple Pay due to lingering consumer confusion. But Apple must keep its eyes on a long-term goal. "We need to be judging Apple Pay over five years at the earliest and not one month," said Celent analyst Gareth Lodge.