9 Bankers' Opinions of Apple Pay
Published October 24, 2014 1:34 PM
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Updated October 20, 2016 10:36 AM
1 Min Read
David Paul Morris/Bloomberg
Apple Pay's launch coincided with the start of SourceMedia's PayThink conference in Phoenix, where executives from many banks and other financial companies provided their impressions of Apple's new mobile wallet. (Image: Bloomberg News)
Is Apple a Friend...?
USAA's Neff Hudson praised Apple for its strategy of "preserving the current system" and working with banks. This approach was "far different " from the strategies of other mobile wallet makers, he said.
...Or a Foe?
Citizens Bank's Michael Battagliese wasn't so hot on the terms Apple sets for banks to participate. Signing up with Apple is "the most one-sided agreement I have ever seen," he said, cautioning that Apple could unilaterally change the terms at any time to get more out of banks.
Banks Must Do More
BBVA Compass' Jon Groch emphasized that banks must still have their own mobile wallet apps even if they participate in Apple Pay. BBVA plans to adapt its Android app , which provides transaction alerts and account management features, to provide an incentive to customers to choose its card for Apple Pay purchases.
A Difficult Choice
Wintrust Financial's Tom Ormseth is concerned that the costs of supporting Apple Pay may outweigh the benefits. "It could end up we will have to support it , but lose money on the marketing end," he said. Wintrust is considering whether to sign up with Apple, develop its own wallet or promote other payment technologies. (Image: iStock)
Merchant Motivator
U.S. Bank's Pamela Joseph praised Apple for doing something the banks could not. "We haven't had success [with NFC payments] because we haven't had the merchant community in lockstep," Joseph said. Apple's small merchant base "will grow quickly and rapidly," she said.
Learn from History
RBC's Linda Mantia suggested that bankers work together to respond to Apple Pay's plans for in-app payments. Otherwise, the banks risk repeating the mistakes they made with contactless cards , where they created a "competitive environment" that frustrated merchants and consumers.
Team Effort
Bank of America was thrust into the spotlight for early Apple Pay glitches, and quickly acknowledged the problem and refunded duplicate transactions. But it is every stakeholder's responsibility to make sure Apple's wallet works as advertised, according to the card network executives who spoke on the topic. (Image: iStock)
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Security Starting Point
MasterCard's Matt Barr plans to use Apple Pay as a launching point for a broader push around tokenization. The card network plans to "take this moment that Apple has created in security and take it across all of the other channels in operating systems and smart devices," including MasterCard's MasterPass digital wallet, he said.
Threat of Obsolescence
PNC's Matthew Miller warned that the banking industry might suffer the same fate as the music and book industries if it is not fast to adapt. "We've got Apple Pay ... [and] several other players getting into the game right now," he said. "[Banks] could go out of business right now if we don't dramatically change." (Image: iStock)
