Skip to main content

How Apple will Conquer the Mobile Payments Market

Back in 2003, Apple launched the iTunes Music Store with 200,000 songs offered at 99¢ each and forever changed the music recording industry. Apple has a history of being a disruptor -- they're the ultimate opportunist that knows how to exploit fear, uncertainty and doubt.

They find opportunity where the executive leadership of the traditional incumbent players are very weak, indecisive and lack a forward-thinking vision of the future market dynamics. So, is that why they launched Apple Pay, to disrupt the nascent mobile payments industry?

Primed and Ready for Exploitation

The latest market study by Juniper Research has found that there will be 516 million mobile users of Near Field Communication (NFC ) contactless payment services by the end of 2019, that's up from 101 million this year.

Their study findings argue that Apple's introduction of an NFC-based payment mechanism -- now known as Apple Pay -- would stimulate the wider marketplace, helping to address the key challenges of contactless awareness and acceptance.


At the same time, Juniper observed that NFC solutions utilizing HCE (Host Card Emulation) were steadily gaining traction within the banking sector. The current momentum in the global marketplace was starting to have an impact.

It said that several pioneers -- including BBVA and Bankinter in Spain and CUA in Australia -- had already launched commercial services, with pilots in operation in countries such as Russia and New Zealand.

Marginalizing the Mobile Network Operators

However, Juniper also pointed out that both these developments threatened the opportunity within NFC for mobile network operators (MNOs). Besides, given Apple's prior success in using the iPhone business model to manipulate and control the hapless executives at mobile service providers, they were prepared to make their next move.

With Apple Pay, the secure element is embedded on the handset and controlled exclusively by Apple -- with HCE, the SE (secure element) no longer has to be physically present in the handset -- once again removing the requirement for MNO involvement.

"We would envisage that while NFC deployments and consumer activity will be buoyed by these developments, the opportunities for network operator involvement are limited. Hence we are likely to see more operators re-evaluating their existing commitments to NFC and possibly withdrawing from the space," said Dr Windsor Holden, head of consultancy and forecasting at Juniper Research.

That being said, it's still unclear, are the current incumbents within the mobile payment sector willing to let Apple dictate the terms of market development for this huge forward-looking opportunity? Will they capitulate? Moreover, was the iPhone introduction a supreme Trojan Horse marketing strategy?

Other key findings from the study include:

  • Three quarters of smartphones worldwide will contain an NFC controller chip by the end of the decade.
  • While NFC can offer retailers a strong value proposition in terms of customer retention and loyalty opportunities in addition to payment, most retailers remain unclear as to its tangible benefits.

Popular posts from this blog

Software-Defined Infrastructure: The Platform of Choice

As more organizations adapt to a hybrid working model for their distributed workforce, enterprise CIOs and CTOs are tasked with delivering new productivity-enabling applications, while also seeking ways to effectively reduce IT cost, complexity, and risk. Traditional IT hardware infrastructure is evolving to more software-based solutions. The worldwide software-defined infrastructure (SDI) combined software market reached $12.17 billion during 2020 -- that's an increase of 5 percent over 2019, according to the latest market study by International Data Corporation (IDC). The market grew faster than other core IT technologies. The three technology pillars within the SDI market are: software-defined compute (53 percent of market value), software-defined storage controller (36 percent), and software-defined networking (11 percent). "Software-defined infrastructure solutions have long been popular for companies looking to eliminate cost, complexity, and risk within their data cente

Digital Identity Verification Market to Reach $16.7B

As more enterprise organizations embrace the ongoing transition to digital business transformation, CIOs and CTOs are adopting new technologies that enable the secure identification of individuals within their key stakeholder communities. A "digital identity" is a unique representation of a person. It enables individuals to prove their physical identity during transactions. Moreover, a digital identity is a set of validated digital attributes and credentials for online interactions -- similar to a person's identity within the physical world. Individuals can use a 'digital ID' to be verified through an authorized digital channel. Usually issued or regulated by a national ID scheme, a digital identity serves to identify a unique person online or offline. Digital Identity Systems Market Development Complementary to more traditional forms of identification, digital identity verification systems can enhance the authenticity, security, confidentiality, and efficiency of

Global Pandemic Accelerates the Evolution of Transportation

Given the current trends across the globe, organizations that depend upon the continued growth of personal vehicle ownership will need to consider a plan-B scenario. While some companies will be able to adapt, others may find that their traditional business model has been totally disrupted. According to the latest worldwide market study by Juniper Research, Mobility-as-a-Service (MaaS) will displace over 2.2 billion private car journeys by 2025 -- that's rising from 471 million in 2021. Juniper believes that for MaaS to enjoy widespread adoption, subscription or on-the-go packages need to offer a strong combination of transport modes along with feasible infrastructure changes, high potential for data collection and low barriers to MaaS deployments. Mobility-as-a-Service Market Development The concept of MaaS involves the provision of multi-modal end-to-end travel services through a single platform by which users can determine the best route and price according to real-time traffic