Apple announced its mobile payment service — called Apple Pay — Tuesday, effectively sending shivers down the metaphorical spines of competitors like Coin, Google Wallet, and Softcard.
But what is Apple Pay? Apple's Eddy Cue pretty much covered it during the (painfully) slow intro video: Instead of wasting your precious time rummaging around for your credit card, why not use your phone — which probably never leaves your hand — to digitally pay with a single tap instead?
Apple Pay, though, isn't the first service to command your credit cards. Here's how it stacks up against other wallet eradicators.
What It Does: By using NFC (near-field communication) technology, the service will store credit cards (Visa, Mastercard, and American Express) and encrypt each transaction made at participating stores using receivers for devices with Apple Pay.
Why It's Cool: It eliminates the wallet and will certainly speed up the process — even if the process doesn't take that long in the first place. Either way, it takes away the middleman at a slew of stores already, including Subway, Disney, Walgreens, Macy's, Sephora, and more.
Why It's Not So Cool: Three major questions remain: A) Do we really need it? B) When your phone runs out of battery, will you end up needing your physical cards anyway? and C) Do we want to put all our credit card information into one device, given privacy concerns running rampant already over services like the iCloud? Tim Cook says it's all the more reason you'll need Apple Pay: "We're totally reliant on the exposed numbers, and the outdated and vulnerable magnetic interface — which by the way is five decades old — and the security codes which all of us know aren't secure," he said on stage, showing off the Touch ID confirmation feature required to carry out a transaction.
What It Does: Coin is essentially the same thing as Apple Pay, but it uses a device instead of an App inside an Apple product. That device then does what Apple Pay is going to do, it consolidates all the cards you would normally carry in your wallet into one place, which you can then use wherever magnetic stripe card readers are accepted.
Why It's Cool: Same thing — you've got all your cards in one place. But maybe a slight leg up for Coin would be its transaction method, which doesn't require stores to set up a receiver. The device itself is the same size as a typical credit card and can hold up to eight cards at a time. (The mobile app can store an unlimited amount.) It can also be used in an ATM, making it more versatile than Apple Pay, at least for now. Also cool: It doesn't require regular recharging — one Coin should last you two years.
Why It's Not So Cool: It's not ready yet, and with all the hype around Apple Pay, Coin's preorder numbers might see a drop. Because, let's face it, not as many people know about Coin, and it doesn't have the resources to pull off what Apple can with a huge event. Plus, Coin raises the same security questions — when you've got all your card information in one place, that might make it easier to lose. Even though Coin doesn't control or monitor any financial information, that goes both ways — if fraudulent activity occurs, it has no way of alerting the user.
What It Does: Every card you have, credit, debit, gift, etc. — you can carry them in your Google Wallet for safekeeping. In that way, it's not quite the same as the others. Like many apps that require bank account or credit card information, it can pull from your verified account to send and receive money from your friends (sort of like Venmo) who have Google accounts. You can also use the Google Wallet Card to retrieve money from your balance at ATMs.
Why It's Cool: It's versatile, and it's nice to stay organized. And given it's a Google product, it makes shopping through Google easy: Need to watch a TV series on Google Play? Go ahead and use the Google Wallet, which already has your information. Plus — and this is a slight leg up over Coin — it offers 24/7 fraud monitoring, and can disable your card or phone from your Google Wallet account.
Why It's Not So Cool: While it's versatile, it hasn't quite caught on. Because it's Google, it favors Android devices (it's also available on iPhones), and only on NFC-enabled Androids can it be tapped for transactions in stores — the technology Apple is looking to take full advantage of with Apple Pay. Because Google failed to gain much traction, improvements may be overlooked when Apple Pay jumps in with full NFC capability.
Softcard (Née Isis Wallet)
What It Does: You add your credit cards (American Express, Chase, Wells Fargo) to Softcard, you go to participating stores, you pay using your app, which connects with an NFC capable device. Noticing a pattern?
Why It's Cool: It's made by people who understand mobile, with founders coming from AT&T, T-Mobile, and Verizon Wireless. It's usable nationwide, and it's capable of holding loyalty cards and redeemable offers. It's contactless, and just like the others, organized. Simple enough.
Why It's Not So Cool: Same thing as Google Wallet — not a lot of people have caught on, no thanks to the recent name change. Oh, and it requires an NFC compatible phone, as well as an enhanced SIM card that can secure your payment information. It's just a few more steps, but enough to make consumers look for easier setups.
And Everyone Else
Finally, what about Square, Amazon's Local Register, or other credit card readers? We won't go into them, but all credit card readers might want to take a second look at their approach if Apple Pay catches on. Being a credit card reader is now a step behind being a credit card holder if more and more stores add NFC compatible devices. Even as Square and apps like Uber have made mobile payments more accessible, they don't have the power Apple has.
But will Apple Pay catch on? As The Verge noted, Apple already has about 800 million credit cards on file through iTunes, giving the company a great shot at bringing mobile payments mainstream. Huge companies like eBay and Google have already attempted to do so, and Apple Pay has a long way to go.
Still, that's just Apple's style. As Bloomberg pointed out:
The tech giant [follows] a familiar pattern: let the first movers flail with the earliest versions of some product or service, then release a more polished version of the same idea. The mobile wallet in 2014 is a lot like the MP3 player in early 2001, just before the launch of the iPod, or the smartphones available in 2006 ahead of the first iPhone. The tools now exist for fully functional mobile wallets, just not in a way that has won over the shopping masses.
The first movers have flailed. It's Apple's turn.