UK mobile operators EE (Everything Everywhere), O2 and Vodafone-owned Weve decided to scrap its mobile wallet plans, in the wake of Apple announcing its NFC chip is to be exclusive to Apple Pay. Weve said it came to its decision to dis-band, citing disagreement in operational methods but no doubt Apple’s announcement clinched the deal, or non-deal, as it were, writes Anna Milne
Apple has taken the fizz out of the mobile payments industry-wide celebrations by locking out all third party apps from the new iPhone’s NFC chip. In doing this Apple has doubled down on its bet that consumers want mobile payments to be simple, secure and free of choice. It is also quite typical of the richest company in the world. In doing this, Apple reinforces its confidence in its product, conveying a message of not wanting to allow any other apps into its walled . Going it alone like this screams arrogance and strengthens division in the market – not necessarily a healthy business model.
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Google Android looks set to be the focus now of mobile operators, despite its own so-called wave and pay wallet service having stalled and indeed Weve has said that individual apps from the telecos will replace the joint project.
As for these individual apps, EE’s Cash on Tap is keeping its head above water and has extended its service across London’s transport network. This scheme might just play into Apple’s hands, driving newly-educated contactless convertees right into camp Apple Pay. The FT said Apple Pay was "an iPod moment for cash and credit cards". In the same article, it revealed that Apple receives a likely 15 cents from every $100 of Apple Pay transactions, an amount Google could never secure the likes of. This alone helps understand why Apple won’t share the secure element.
It’s a step towards totalitarianism in the NFC landscape, and that’s a bleak outlook. Apocalyptic Terminator-esque visions of contactless providers dead on the ground everywhere come to mind. Apple’s logo waxes bigger and no contactless payer escapes Big Apple’s watching eye.
Speaking about the future of digital banking and payments at a roundtable event organised by Yahoo in September 2014, consultant Roy Vella said that (paraphrasing) Apple doesn’t invent, it just innovates and permeates. It’s good at ironing out technology for ease of consumer use- technology that more often than not is not new. There is still room for others to explore person-to-person or even Bluetooth, so someone can fire a payment at a shop from the seat of their car, for example- that oft-dreamed about kind of payment capability. Fire-and-collect? But in the meantime, it looks like mobile operators will focus on keeping the customers they have rather than trying to compete. If, however, Google Android can come up with a competitive answer in the near future, this harsh landscape may not last so long and Apple may well decide to open its NFC orchard doors.
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