A Quick Take on Apple Pay

Navigator Edition: September 2014
By: Jeff Crawford and Matt Zalubowski

On September 9, Apple fired the proverbial shot heard around the payments world with its announcement of Apple Pay, a payment service that is integrated into the new iPhones that enables both contactless point-of-sale and in-app payments. The fanfare surrounding the launch of the larger phones was not unfounded as Apple has reported selling more than 10 million iPhone 6 and iPhone 6 Plus devices, a new launch weekend record.

Apple Pay is set to launch in October and it is integrated into the iOS operating system and managed through Apple’s existing Passbook app. Despite differentiating itself by offering added levels of security, through the use of tokenization and biometric authentication, Apple Pay was built to work within the existing payments infrastructure. Furthermore, Apple Pay is not a new payment scheme and transaction level data will remain with issuers and merchants, not Apple.

We continue to believe that payments innovation must benefit all constituents. On the surface Apple Pay appears to deliver on this tenet. Rather than disrupt the market, Apple utilized its market influence to drive an unprecedented level of industry cooperation. Customer adoption will ultimately determine whether Apple Pay is a success, as the digital wallet and payments space has been difficult to penetrate, even with significant investment, time-in-market and broad feature-rich propositions. Apple too has significant challenges ahead, including onboarding more and larger merchants as well as convincing customers that Apple Pay is actually a better way to pay, but Apple is as well positioned to succeed as any other mobile payment initiative in the market today.


For more information, please contact Jeff Crawford, Manager,, member of Deposit Access Practice, specializing in Debit and Prepaid; or Matt Zalubowski, Manager,, specializing in Credit Card Issuing.

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