Is Apple Inc. (AAPL)’s Pay Product a Game Changer in Mobile Payment Business?


Apple Inc. (NASDAQ:AAPL) launched their new mobile payment product, Apple Pay. This product allows the user to use their iPhone to make their payment without using any cards. This is a brand new innovation in the Payment business. Manhattan Venture Partners Max Wolff and NYSA Managing Partners Hans Morris talked on CNBC about the Apple Pay product.

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Morris thinks that these ideas of using mobiles and cards for payments was nothing new and many successful companies have tried a lot of these in the past. He added that people in US would never mind using their credit cards to make their payments. But he feels that the new technology poses a lot of advantages over the traditional credit card mode.

Morris thinks that the new technology that Apple Inc. (NASDAQ:AAPL) has come up with is the secured way of doing the payment and since people are more interested in the security part these days, the Apple product might get a boost in the market. He added that Apple was able to cut through all the complications surrounding the payments and come up with a technologically compelling product.

No other company has been able to do what Apple Inc. (NASDAQ:AAPL) did with their Apple Pay product.  Apple could cut into the revenue system which involves merchants, issuers and bankers for every transaction. Apple is the only company, which has negotiated and got a part in the revenue system for payment business.

Wolff said that Apple Inc. (NASDAQ:AAPL) Pay product might positively impact the future of mobile payment in addition to the company’s future. He thinks that the companies like Square and Swipe are at the disadvantage due to the launch of the Apple Pay product.

“[…] Apple has now insinuated into the mix with a Payment app native to its operating system, that’s going to be bad for the stand alone payment apps, many of whom have entered the fray […] getting a little bit of economics,” Wolff said.

Wolff said that the addition that the other payment apps add incremental cost to the economics, which was shared by consumers and merchants. But with the Apple Pay, the incremental cost is very less compared to other product. In addition the product provides a lot of added advantages and conveniences to merchants and consumers. But, he thinks that it is too early to classify Apple Pay as a game changer.

Among the shareholders of Apple Inc. (NASDAQ:AAPL) is the Icahn Capital Lp, led by Carl Icahn. As of 30 June, 2014, they hold around 52 million company shares.

Disclosure: None

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