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Market changes - POS credit card machines were scheduled to be phased out in favor of chips and NFC by EOY2015 [1]. Apple Pay didn't come out of the blue. The

by npunt 11y ago

Market changes - POS credit card machines were scheduled to be phased out in favor of chips and NFC by EOY2015 [1]. Apple Pay didn't come out of the blue. The impending POS infrastructure change created the opportunity to launch a better payments user experience in the 2014-2015 timeframe. Apple knew this, and developed/acquired/refined a better security method (touchID + tokenization) and corresponding user experience to negotiate on favorable terms with banks and merchants, which sealed the deal for many and created momentum toward getting stragglers onboard and reaching broad market penetration. Just adding an NFC chip and calling it a day changes nothing. Few markets are penetrated by hardware - or even hardware and software - alone. [1] http://blogs.wsj.com/corporate-intelligence/2014/02/06/october-2015-the-end-of-the-swipe-and-sign-credit-card/ http://blogs.wsj.com/corporate-intelligence/2014/02/06/octob...

bduerst 11y ago
That's not quite right. That article is about chip & pin only, and not about NFC. Apple made the business decision to build their own payments system and lock merchants in using Passbook, rather than use NFC, which is more open. When it comes to market adoption of hardware, typically the market leader gets picked up for adoption. By forcing their own version of mobile payments (passbook) and not allowing NFC, the market was split and NFC adoption stymied.
- spiralpolitik 11y ago
  That's not quite right either. Apple Pay does not require Apple-specific contactless payment terminals and will work with Visa's PayWave, MasterCard's PayPass, and American Express's ExpressPay terminals. So merchants are not "locked in" to passbook. The reason for Apple Pay success is that they worked with the companies in question so that the infrastructure was already in place when the phone was launched. I was in the UK the week of the Apple Pay launch there and the same terminals that 3 months prior were accepting my contactless card were now accepting my iPhone. In other words it just worked.
  - bduerst 11y ago
    None of that was true in 2012 when Apple released Passbook. [1] The only reason Apple has support for those now in 2015 is because merchants weren't falling for the walled-garden ploy. Apple has finally caught up with other forms of payment, which is why Apple was a major staller for NFC technology adoption. [1] http://gizmodo.com/5944863/apple-reveals-full-line-up-of-passbook-supported-apps http://gizmodo.com/5944863/apple-reveals-full-line-up-of-pas...
    - npunt 11y ago
      Um... your link doesn't refute parent. Passbook in 2012 was just an endpoint for things like boarding passes, tickets, and gift cards you bought elsewhere. From related link [1]: > There's no NFC in the new iPhone, but you'll be able to use your screen as a scannable gift card/plane ticket/voucher/etc. with Passbook, which creates a virtual bundle of all those annoying cards you cram into your wallet. Here's an ideal little scenario for you: a free cup of coffee at Starbucks, because you've got a $25 credit built right into your phone. Hand it to the cashier, beep, coffee, slurp, bye. If you think this somehow stymied NFC... thats an incredible stretch. Before Apple was it the gift card mafia stopping NFC? Were merchants going to just throw away their perfectly usable POS machines... because technology? [1] http://gizmodo.com/5944514/all-the-best-new-features-of-ios-6 http://gizmodo.com/5944514/all-the-best-new-features-of-ios-...
      - bduerst 11y ago
        Yes it does and you're splitting hairs. Passbook was Apple's mobile payment response to NFC, and why they didn't adopt NFC in iPhones. They were trying to build an app ecosystem using credits for their mobile payments, and it didn't work so years later we see them catch up with Pay. The entire context of this discussion was how Apple killed NFC adoption in 2012 by not supporting NFC and splitting the market with their own walled-garden solution. Even your quote shows the surprise on Gizmodo's part that they released some gift card substitute...
        npunt 11y ago

by npunt 11y ago

bduerst 11y ago

That's not quite right. That article is about chip & pin only, and not about NFC. Apple made the business decision to build their own payments system and lock merchants in using Passbook, rather than use NFC, which is more open. When it comes to market adoption of hardware, typically the market leader gets picked up for adoption. By forcing their own version of mobile payments (passbook) and not allowing NFC, the market was split and NFC adoption stymied.

spiralpolitik 11y ago
That's not quite right either. Apple Pay does not require Apple-specific contactless payment terminals and will work with Visa's PayWave, MasterCard's PayPass, and American Express's ExpressPay terminals. So merchants are not "locked in" to passbook. The reason for Apple Pay success is that they worked with the companies in question so that the infrastructure was already in place when the phone was launched. I was in the UK the week of the Apple Pay launch there and the same terminals that 3 months prior were accepting my contactless card were now accepting my iPhone. In other words it just worked.
- bduerst 11y ago
  None of that was true in 2012 when Apple released Passbook. [1] The only reason Apple has support for those now in 2015 is because merchants weren't falling for the walled-garden ploy. Apple has finally caught up with other forms of payment, which is why Apple was a major staller for NFC technology adoption. [1] http://gizmodo.com/5944863/apple-reveals-full-line-up-of-passbook-supported-apps http://gizmodo.com/5944863/apple-reveals-full-line-up-of-pas...
  - npunt 11y ago
    Um... your link doesn't refute parent. Passbook in 2012 was just an endpoint for things like boarding passes, tickets, and gift cards you bought elsewhere. From related link [1]: > There's no NFC in the new iPhone, but you'll be able to use your screen as a scannable gift card/plane ticket/voucher/etc. with Passbook, which creates a virtual bundle of all those annoying cards you cram into your wallet. Here's an ideal little scenario for you: a free cup of coffee at Starbucks, because you've got a $25 credit built right into your phone. Hand it to the cashier, beep, coffee, slurp, bye. If you think this somehow stymied NFC... thats an incredible stretch. Before Apple was it the gift card mafia stopping NFC? Were merchants going to just throw away their perfectly usable POS machines... because technology? [1] http://gizmodo.com/5944514/all-the-best-new-features-of-ios-6 http://gizmodo.com/5944514/all-the-best-new-features-of-ios-...
    - bduerst 11y ago
      Yes it does and you're splitting hairs. Passbook was Apple's mobile payment response to NFC, and why they didn't adopt NFC in iPhones. They were trying to build an app ecosystem using credits for their mobile payments, and it didn't work so years later we see them catch up with Pay. The entire context of this discussion was how Apple killed NFC adoption in 2012 by not supporting NFC and splitting the market with their own walled-garden solution. Even your quote shows the surprise on Gizmodo's part that they released some gift card substitute...
      - npunt 11y ago