Tag: Apple

Apple launches credit card

Consistent with our thesis that the big tech players are well positioned to disrupt the finance sector, Apple has moved further into financial services with the launch of a new credit card for its iPhone users, at its event today. Users will be able this facility anywhere that Apple Pay is accepted.

The new credit card will give 2 per cent cash back rewards, which is applied directly to the account for purchases made through Apple Pay but only 1 per cent for purchases made using the physical card.

Goldman Sachs has partnered with Apple to produce the card, with Mastercard handling payment processing.

The initial launch in in the USA.

This via Fintech Business. Apple, at its ‘show time’ services event, announced the introduction of a new credit card that aims to have quicker applications, no fees, lower rates and better rewards.

Users will get a physical card but one which does not have any information on it, instead all the authorisation information is stored directly with the Apple Wallet app.

Apple announced that it planned to use machine learning and its Maps app to label stores that you use and to track purchases across categories.

Apple chief executive Tim Cook said that the card would be one of the biggest changes the credit card had seen in decades.

“Apple is uniquely positioned to make the most significant change in the credit card experience in 50 years,” he said.

Vice president of Apple Pay Jennifer Bailey said that the card builds on the work of Apple Pay and uses the power of people’s mobile devices.

“Apple Card is designed to help customers lead a healthier financial life, which starts with a better understanding of their spending so they can make smarter choices with their money, transparency to help them understand how much it will cost if they want to pay over time and ways to help them pay down their balance,” she said.

Ms Bailey said that privacy was a big issue and all tracking information would be stored on users’ iPhones, not on Apple’s servers.

“Apple doesn’t know what you bought, where you bought it, and how much you paid for it,” she said.

Chairman and chief executive of Goldman Sachs David Solomon said he was thrilled to partner with Apple on this card.

“Simplicity, transparency and privacy are at the core of our consumer product development philosophy,” said Mr Solomon.

“We’re thrilled to partner with Apple on Apple Card, which helps customers take control of their financial lives.”

Mastercard president and chief executive Ajay Banga said the company was excited to bring global payments to Apple.

“We are excited to be the global payments network for Apple Card, providing customers with fast and secure transactions around the world,” he said.

CBA and Westpac launch facial recognition on the iPhone X

Commonwealth Bank says it is the first Australian bank to offer customers secure access to their accounts using Face ID, the facial recognition technology built into Apple’s new iPhone X.

iPhone X users will be able to use Face ID to securely log-in to the CommBank App.

“Our customers use secure fingerprint logins on the CommBank App about 30 million times a month,” said Pete Steel, Commonwealth Bank Executive General Manager of Digital.

“Extending that functionality to Face ID is part of our ongoing work to provide a better banking experience to our customers through simple, easy and secure features.”

Face ID is one of the most secure ways to log into an account because it performs in-depth mapping of an individual’s face using more than 30,000 points of reference. These include the spacing between, and shape of, facial features.

“While we strive towards convenience and ease of use, we don’t implement new technology without being able to guarantee security for customers,” he says.

Westpac has subsequently also announced a similar facility.

This despite neither banks offering Apple Pay.

Apple captured 79% of global smartphone profits last year

From The Korea Herald.

Apple Inc. captured 79.2 percent of global smartphone profits last year, according to the latest research by Strategy Analytics on Wednesday, highlighting the US technology giant’s ability to maximize pricing and minimize production costs.

The global smartphone industry was estimated to have posted total operating profits of $53.7 billion last year, with Apple’s operating profit standing at $44.9 billion, the research showed.

Apple’s Iphone (Yonhap)

Apple’s operating profit margin stood at 32.4 percent last year.

In comparison, Samsung Electronics Co.’s smartphone business posted an operating profit of $8.3 billion last year, accounting for 14.6 percent of the global profits.

Samsung is still reeling from the global recall of the Galaxy Note 7 smartphone, which was discontinued in October last year over safety concerns. The South Korean tech giant’s operating profit margin stood at 11.6 percent last year, while its annual sales of smartphones fell to $71.6 billion from $75.2 billion in 2015.

Profitability at Chinese smartphone makers is still low, although their cheaper handsets are rapidly gaining market share.

Huawei posted an operating profit of $929 million last year, accounting for 1.6 percent of global profits. OPPO took 1.5 percent of the global profits, while its rival Vivo accounted for 1.3 percent, according to the research. (Yonhap)

Apple claims banks want digital wallets as a new revenue source

From Australian Fintech.

Apple says three of the big four banks are pushing to pass the costs of Apple Pay on to their customers as a way to “condition the market” into paying extra fees when using a mobile phone to make a ‘tap and go’ payment.

One of the issues in the long-running battle between Apple and Commonwealth Bank of Australia, National Australia Bank, Westpac Banking Corp and Bendigo and Adelaide Bank is whether the banks can pass through to their customers the fee that Apple will require them to pay to use the iPhone infrastructure.

But Apple has described the argument as a “trojan horse”. In a submission published by the Australian Competition and Consumer Commission on Friday, Apple suggests this issue of fees, rather than the bank’s other demand for access to the iPhone’s communication antenna, is motivating the banks, who are all developing their own digital wallets to compete against Apple’s. Digital wallets allow mobile phones to be used to pay through contactless payment terminals.

“Put simply, the applicant banks have the means, notice and opportunity to disadvantage Apple Pay by pricing Apple Pay transactions above transactions made using their own proprietary issuer digital wallets to dissuade cardholders from using Apple Pay,” Apple said. The banks have an “incentive to charge fees to consumers for using Apple Pay to steer customers towards their proprietary payment apps”.

Once the market became accustomed to being charged for using Apple Pay instead of a card, Apple says the banks would be “setting a precedent for charging for mobile payments on other digital wallets, in the future, including the banks’ own proprietary wallets”. The banks could “tacitly extend the imposition of those fees to any digital wallet transaction as a new revenue source,” Apple added.

ANZ deal

ANZ Banking Group broke ranks with the other banks to offer Apple Pay last year; the fee ANZ is paying to Apple has not been confirmed but is understood to be a few cents per $100 of transactions. But ANZ is prevented by its contract with Apple from charging customers for using the service.

The banks’ final submission to the ACCC will be published this week, ahead of the regulator making a decision on the authorisation request, which is expected next month.

Apple said that if authorisation is granted, it will merely provide “cover” for the banks. “The incentive to compete away these fees at the retail level is reduced or removed if there is an ACCC authorised ability to impose Apple Pay transaction fees which provides shelter for their own fees,” Apple said.

Ten years on, the iPhone has taken us back as many steps as it has taken us forward

From The Conversation.

The 10th anniversary of the Apple iPhone reminds us that while it was not the first smartphone, it was the first to achieve mass-market appeal. Since then the iPhone has defined the approach that other smartphone manufacturers have taken.

Smartphones have transformed our lives, essentially giving us an internet-connected computer in our pocket. But while we’re distracted by Candy Crush or Pokemon Go, we are losing freedoms. We are losing control of our own devices, and losing access to the information they contain – in the very same devices that are increasingly important in our life.

To see how far we’ve come, consider that personal desktop computers only became widespread with the IBM PC. By designing the PC with an open architecture, an enormous industry of PC-compatible products from other manufacturers sprang up. It’s the same today: when you purchase a computer, you’ll have (if you wish) the ability and the right to add or remove, swap or upgrade any element of the system hardware, install or remove any software you wish, including the operating system, and access to any information stored on it.

However, today the smartphone or tablet have in many cases effectively replaced the desktop or laptop computer. In parts of the developing world, smartphones are the first experience many have of computing and internet access. The fact that they are small and portable and work wirelessly means they are put to many other uses, such as receiving guidance from navigation systems, listening to music while exercising, or playing games in waiting rooms.

Yet doing something that’s very simple on a computer – such as listing your files – is impossible on an iPhone. iPhone users can change their background image, their ring-tone, the time of their alarm. But the iPhone guards what files it contains jealously. Your phone that is carried everywhere with you, which knows your precise location, which records the websites you visit – has all of its files completely inaccessible to you. If you care about privacy this should sound disturbing.

We have always had the right to govern our own computers, to do with them as we wished. But the smartphones and tablets we’re buying today come without administrator rights: we are merely users in the hands of the big tech companies, and these firms effectively rule the machines we live with.

Information and freedom

Of course, the iPhone does allow access to some information, such as photos, emails or documents. But it is often difficult to get that data off the phone. The way the iPhone communicates with your computer is a closed, proprietary protocol, and Apple changes this protocol each time it updates the phone. So if you use neither Microsoft Windows or Apple Mac computers you will have a hard time even to get your own photos out of your own phone.

Apple also restricts what information can be stored on the device. For example, iPhone users are obliged to transfer any music files on the phone through Apple iTunes software. If you cannot or do not wish to run iTunes – no music for you. Additionally, iTunes will automatically delete all the music tracks on your phone if you try to transfer files from more than one computer, due to digital rights management software that assumes that access from more than one computer means that the file has been shared illegally. It’s a bit like buying spectacles that control the conditions under which you’re allowed to read books. Or a backpack that will destroy all its contents if you attempt to carry items bought from different stores.

The same issue also affects which applications can be installed. If you learn how write code, you can develop your own applications to solve your own unique problems. But the iPhone doesn’t allow you to run those programs: only software authorised by Apple and distributed via the Apple Store is permitted.

Open alternatives

Why so tightly control what we can do with our devices? Some may argue that these restrictions are necessary in favour of security. If we look again at computers, however, we find that Linux, an open source non-commercial operating system, is also the most secure. It’s true that the Android mobile phone operating system, which is more open, is not as secure as the iOS operating system that runs Apple’s iPhone. But it shows that it is possible to have a system that is both secure and open.

In fact, iOS is built around several open source software projects – those whose internal workings are open to anyone to view or modify, for free. But while elements of iOS are open source, they are used as part of a tightly closed system. Android, an open source mobile phone operating system originally created by Google, is the chief alternative to the iPhone. But Android phones too have many closed source components, and Google is constantly replacing open components with closed source ones.

Another alternative comes in the form of Ubuntu Touch, a recent version of the popular Ubuntu Linux for phones and tablets, although it is not yet widely used. The fact remains that ten years on, the mobile revolution kicked-off by the iPhone has taken us several steps forward and several steps back; leaving us uncertain of whether some day we will actually fully own our devices.

Author: Leandro Soriano Marcolino, Lecturer in Data Engineering, Lancaster University

Apple blocks Samsung pay app for iPhones

From IT Wire.

Apple has refused a Samsung pay app for iOS a place in its App Store, according to a report in the South Korean publication, The Economic Times.

Samsung had planned to introduce the app, Samsung Mini Pay, from January and getting it into the app store was the first step in the process.

Samsung had completed testing of the app with some South Korean credit card companies but when it applied for registering the app it received a notice of rejection, the newspaper reported.

No reason was given for the rejection, but the newspaper speculated that it was possible that the app had not met Apple’s policies on security and regulations.

It said Samsung had now decided not to go ahead with the app, and instead concentrate on the Android market with its Samsung Pay app instead.The paper quoted a Samsung Electronics representative as saying, “After Apple rejected registration of Samsung Pay Mini onto its app store, we have decided to focus on Smartphones with Android OS.”

Apple is apparently thinking of launching its own Apple Pay app in South Korea in the first half of 2017, the paper said, adding that the company’s representatives had not provided any indication if this was so when asked.

Samsung Pay, which was launched in August, has so far been used in nine countries. Samsung Pay Mini has been in development for more than a year.

Apple at 40: can walled garden thrive in the new digital era?

From The Conversation.

The stand-out feature of Apple’s 40-year rise to become the world’s largest public company has been its ability to convert ideas into designs that have redefined consumer products. It is astonishing that the iPhone only arrived in 2007 but, in less than a decade, has helped redefine communication, computers, music and the internet.

But just as the PC age transitioned into the mobile computing market, we are now seeing the start of a shift to the era of the “Internet of Things”. What is the future for Apple as the focus shifts from computers in our pockets to computers in all the objects around us, from our buildings to our transport to our kitchen appliances?

The greatest sales growth in Apple’s history came in 2015 but we’re already seeing the mobile and tablet markets mature. Apple’s latest releases – the iPhone SE and the iPad Pro – are really just variations on existing products. When a company runs out of new countries to expand into and its new products are just there to fuel replacement sales, it can expect to see less and less growth.

Internet of Things

The technology market is a fickle and fluid world, new devices and solutions can often come from new directions that disrupt products and services. While the PC and mobile market has become a connected cloud of content and apps – such as Apple’s iCloud online storage system and Siri voice recognition program – this design is now shifting into “connected objects and things”.

“Internet of Things” has become a broad term covering “what is coming next”. This is a move to connect 50 billion objects or more into a new era where individual cars help plan a city’s traffic management and fridges automatically order more food for you when you run out.

But how do I make a phone call? Shutterstock

We’ve already seen the beginning of this movement with the advent of wearable devices that track your fitness levels and allow you to make contactless payments. But Apple’s entry to this market, the Apple Watch, has made far less of an impact than previous new launches. Its first connected device for the home, Apple TV, has had similarly limited success.

Apple has also introduced developer software to allow other manufacturers to connect their home appliances (HomeKit), medical and fitness devices (HealthKit) and even cars (CarPlay) to the company’s technology. But these things remain underdeveloped – early market rather than mainstream.

Can Apple replicate its success?

Apple’s success has been based on redefining existing products, but when it comes to new technology markets it has little to no track record. While Apple Watch and Apple TV are potentially leading products in their markets, they still aren’t radical compositions of technologies that can produce the kind of popularity and “wow factor” we saw with the iPhone and iPad. Even with the firm’s reported move into driverless cars or other possible difficult, high-risk “moon shot” projects, the question remains whether it can create a critical mass for the new category of connected computing.

The other issue for Apple is that the Internet of Things involves connecting many different types of products, appliances and content services from not just one company but potentially hundreds, including rival system manufacturers.says above they are doing this – are the above apps, which he then says below?. This differs significantly from Apple’s previous “walled garden” approach that has involved working with app developers, but making core technology incompatible with that of competitors – right down to its charging cables. The question is whether the firm’s home, health and car development platforms will also remain closed to rival companies, preventing customers from picking and choosing from different systems.

With its past record, the expectation of Apple is sky high. But even the enormous funds of US$160 billion that the company is sitting on – more than the GDP of many small countries – is no substitute for creativity and genius. I believe Apple will be able to position itself at the vanguard as the market moves past this latest inflexion point. But having your own walled garden may not be enough when consumers and enterprise want a multiple-connected experience.

Author: Mark Skilton, Professor of Practice, University of Warwick

Amex Holders First To Use Apple Pay In Australia

As reported  by the tech blog 9to5Mac, Apple has just announced that its mobile payments service, Apple Pay, will be available to American Express users in Australia and Canada in 2015 and Spain, Singapore and Hong Kong in 2016.

Apple chief Tim Cook said that Apple Pay would be made available only to “eligible American Express customers in these regions”, represent a reduced roll out compared with users in the UK or the US.  The Australian deployment will bring the total number of Apple Pay markets to four.

Apple Pay’s mobile payment and digital wallet offering allows users to make payments with their iOS devices, including Apple Watch. At its US launch Apple said more than 1 million credit cards had been registered on Apple Pay in its first three days of availability.

Apple’s brilliant assault on advertising — and Google

From Calacanis.com

Apple’s brilliant assault on advertising — and Google

For their iOS 9 release, Apple not only permits, but actively encourages developers to make Apps that remove advertising and tracking from the web. They added this feature deliberately; it’s not a hack by developers they’ve turned a blind eye to.

HOW EFFECTIVE ARE MOBILE AD BLOCKERS

I’ve been using two Apps called Adblock Fast and Crystal for the past week and surfing the web on my iPhone has become delightfully fast and uncluttered. Blocking ads on your mobile phone is like moving from a crowded apartment complex in a polluted, violent city to a peaceful lake house.

It’s a massive, noticeable change for two important reasons that have to do with the device you’re holding: screen size and bandwidth.

Given the increasing size of our desktop monitors, multiple windows to choose from, and increasingly fast cable modems and fiber connections, ad blockers have been a minor innovation on the desktop this past decade. (We hate you if you have fiber, really.) On a desktop, you barely notice the ads are gone, because the ads weren’t laying on top of the content. They were typically around the content.

On an iPhone, well, you’re dealing with 5-10% of the screen size of your desktop monitors, so publishers putting up a roadblock on the content, then asking you to use your fat fingers to hit the tiny little X or ‘skip the ad in 4… 3… 2… 1…’ is just overbearing.

Mobile advertising is so ugly and intrusive, it actually makes people AVOID mobile browsing. That’s why the ‘read it later’ feature, pioneered by Marco Arment’s brilliant Instapaper and Nate Weiner’s Pocket, became so popular that Apple copied them. When a user hits ‘read it later,’ it means ‘read this when I don’t have to deal with all this bullshit.’

APPLE’S MOTIVATION IS MARGIN

Apple doesn’t give an ‘ish about advertising, unless of course they’re buying it for their award-winning TV commercials. (More on that later.) Apple cares only about you loving and using the product that now generates nearly 70% of their (top-line) revenue – and perhaps even MORE of their (bottom-line) profits – the iPhone.

The iPhone is everything to Apple. Everything important about Apple – their resurgence as a company, the lust their fans feel for the brand, the fanboy/girl obsession with their keynotes, the slavish CNBC analysis over everything Tim Cook says – traces back to the luscious, warm-gravy margins of the iPhone.

For every 1% in smartphone marketshare Apple converts, they make another $10b a year in revenue*, and Apple very much thinks that they can convince the world to convert from cheap phones to the more expensive iPhone.

[ * back of envelope: 1.44b smartphones will ship in 2015, 1% = 14m iPhones * ~$658 average revenue per unit = $9.5b ]

And they’re right.

Life is better in Apple’s world.

WHY LARRY LEFT GOOGLE

Google is assaulting us with advertising to the point that the FTC and EU want to sanction them (in fact, the WSJ reported that, magically, the FTC’s action against Google was killed – conspiracy theories abound).

What is not up for debate is that Google is ripping away our privacy every day, taking the most intimate pieces of our lives and selling them in buckets of parts – like pieces of cow flesh in a Whole Foods display case.

Google makes a massive portion of their money, according to studies, getting people to accidentally click on ads (40% of people don’t know Google Ads are ads). Ads that are taking up the top 11 of 13 search results on some search pages.

Google kept heating up the water until they accidentally boiled the frog. And the frog is us.

Apple knows it and they’re assaulting Google on every front. Ad-blocking is the attack we are talking about today, but privacy is another and their wildly-improving, hiding-in-plain-sight search engine is yet another. I wrote about this search engine back in June 2015, and I will do a Part 2 of this piece if someone reminds me and I actually get some sleep this week. (I got some life-changing, big news last week and I’m not sleeping well … I’ll disclose it when Gayle King interviews me about “having it all.”)

Google knows what’s up, and that’s why Larry gave himself a promotion to CEO of Alphabet.

Larry doesn’t want his legacy to be grinding every last percentage point out of their advertising network. Sergey doesn’t want folks coming up to him at parties and asking him about why they are trying to kill Yelp, Mahalo, and eHow (trust me, I have the inside line on this one).

Nope, like the Middle Eastern sovereign wealth fund I met with yesterday, Google is trying to trade their oil money for something more refined, like self-driving cars, life extension (Calico) or home automation (Nest).

Google wants to be proud of their legacy, and tricking people into clicking ads and selling our profiles to advertisers is an awesome business – but a horrible legacy for Larry and Sergey.

[ Side note: When I asked the Sovereign wealth fund why they were bothering to meet with me, when they had billions of dollars to put to work and I angel invest $100,000 at a time, they said they were rebalancing their oil to tech and they needed to meet with the ‘mother of unicorns.’ I think that makes me Khaleesi? That’s kind of awesome. ]

IS IT MORAL FOR APPLE TO BLOCK ADS?

It’s your device, so you can do whatever you want with it. When you download something onto your device, it is now yours to remix and play with in any way you want – provided you don’t republish it and make money from it. (Fair use is the exception here.)

According to this basic tenet, if I buy the New York Times in print, clip out all the ads and then tape it back together at home, well, that’s my right.

Now, Apple didn’t just bake ad blocking into the browser. They enabled developers to add ad blockers – via the App store – to consumers’ browsers. In this way, you still have to buy the scissors and clip the ads, but that takes under five seconds and will be enabled for the rest of your life.

Apple could, and would, be sued by publishers if they enabled it themselves.

They would be sued, in all likelihood, for breaking the publishers’ Terms of Service, or perhaps better stated, for helping users to break the Terms of Service. This means if you make an App that blocks ads, be ready for a HUGE lawsuit. It will happen if these things hit scale. Apple might become party to these lawsuits for contributing to the interference of a company’s ability to do commerce. The side argument will be, as I’ve outlined in this post, that Apple and the ad blocker companies are benefiting unfairly on the publishers’ backs – consider this piece an amicus brief.

I’m not sure any of these legal concepts would actually work, but Google and publishers will put up a united front against ad blocking if it becomes > 25% of mobile users – of that you can be sure.

Is it moral for Apple to screw publishers? Wow, that’s a big question, but in a nutshell, this is business and it’s not personal. Apple wants to make consumers buy iPhones and use them and blocking ads will help them beat Android.

Apple’s highest moral commitment is to users – not publishers. So, although Apple covets content creators, it doesn’t put their need to make a few shekles above a user’s ability to enjoy the experience of the iPhone.

Apple really wants publishers to charge for content and take 30% through the App store and their marketplaces. People who work at Apple are rich, so they don’t really get the concept of not being able to afford to pay for content.

It’s classist, to be sure. Just like the margins on iPhones make them hard for poor people to embrace them. Then again, if you look at the cost of a new iPhone phone every 30 months, it’s around $20 a month (say $650 with a $50 trade in of your old phone).

If an Android phone was half the cost of an iPhone, the cost difference is $10 a month – or about one hour of work for the lowest paid folks in the United States.

One extra hour of work a month to own the best device as your PRIMARY consumption device in the world IS A BARGAIN.

Tim Cook knows this and he is watching as the poor people of the world figure it out. Apple’s message is the same as Starbucks: treat yourself poor people, you deserve it!

And they’re right! Why shouldn’t the housekeeper, gardener, or teenager spend just $0.35 a day to have the better phone if they use it three or four hours a day?

Back to stealing.

Would Apple allow you to put a bittorrent App on your phone and download TV shows and series, instead of paying for content in iTunes? Well, we actually know the answer to that question – hell no!

Apple draws the line at stealing content, and doesn’t see the subversion of ads as stealing – which all of us in the real world know it is. Undermining a publisher’s ability to monetize is stealing, but it’s Robin-Hood, feel-good stealing.

So killing advertising not only crushes Google, it also could flip many publishers from ad-driven models to subscriptions … in Apple’s App store.

Oh yeah, Apple launched a News App as part of iOS 9, too.

That’s interesting timing. I wonder if Apple will launch a ‘pay $10 a month for 500 newspapers/magazines’ subscription and share that revenue with those publishers based on some slick algorithm. (Consumption + a base payment for everyone.)

Apple will make their News App the Spotify of Content … giving every publisher a basic income based on the profits of the iPhone ecosystem. In fact, Google bought Oyster which was the “Netflix of books.” The idea of a big company providing all-you-can-eat for a monthly price is coming soon, you can be sure of that.

In Conclusion

Publishers are screwed.

Google is really screwed.

Consumers win.

Apple really wins.

Now, will consumers ultimately lose because publishers go out of business? That’s the obvious question … with the obvious answer: we’re gonna find out next year.

One thing you can count on: Apple has a Master Plan around privacy, saving the news business, doubling iPhone market share and killing Google for double-crossing Steve Jobs.

Never forget what Steve Jobs said:

“I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40 billion in the bank, to right this wrong. I’m going to destroy Android, because it’s a stolen product. I’m willing to go thermonuclear war on this.” – Steve Jobs to Walter Isaacson in 2010.

Mobile Payments: The Delay of Instant Gratification

Good article from strategy+business, on the fact that platforms like Apple Pay and Google Wallet will need to ensure a seamless and secure experience for merchants and consumers. It once again highlights the upcoming payment wars.

During the next few years, many competitors, from both financial services and the hardware and software industries, will jockey for control of the sector. Payments for retail purchases through smartphone apps still represent a tiny fraction of transactions for the $2 trillion worth of goods and services that pass through retail establishments and banks each year in the United States; still, by 2018 digital wallet transactions will likely grow to represent about 6 percent of total card transactions — the majority being small-ticket purchases made online or within apps. This figure may sound small, but it’s a significant shift: Few would argue that e-commerce isn’t mainstream, yet Internet sales represented only 6 to 7 percent of all retail sales in the United States in 2014.

Just as people tend to compartmentalize their use of credit cards — one card for daily purchases, another for big purchases, and several for specialty retail — they are likely to use different mobile payment apps for different brands and different types of transactions. But only a few general-purpose branded e-wallets are likely to be left standing when the industry shakes out; that’s the nature of shared platforms. The companies that ultimately control the mobile payments platform may be technology companies or banks or retailer consortiums, or a combination of all three. The winners will be those platforms that offer five critical elements:

1. Merchant acceptance. Apple Pay is accepted at more than 700,000 merchant locations, but that number is less than 10 percent of the 8 million to 10 million merchant locations in the United States. This is significant: Consumers are less likely to use a credit card that’s not accepted everywhere. As a point of contrast to mobile adoption, Visa and MasterCard’s traditional plastic cards are accepted at 99 percent of merchant locations.

2. Interoperability. In its current version, Apple Pay does not support all cards or merchants; some private-label store credit cards and regional debit networks are excluded. Eighty-three percent of the credit-issuing market had agreed to be part of Apple Pay when it launched, but that left almost 20 percent of the market unsupported. Recently, Apple has started to expand its coverage. For example, the company worked out an agreement with Discover in April 2015 that will give Discover customers access to the app beginning the following fall. Further expansion will be critical if Apple is to ensure that any customer is able to make a transaction from his or her bank.

3. Security. For consumers and merchants alike, the fear of a breach is currently the number one obstacle to adopting mobile payments. Retailers have taken to heart the experience of Target, whose profits declined 45 percent after its well-publicized security breach in late 2013. The CEO and CIO were let go, and the company spent $250 million, excluding insurance offsets, to address the issue. Apple advanced the game by “tokenizing” the transaction (removing account information from the data flow) and using fingerprint recognition technology. But until end-to-end encryption is in place to secure the entire transaction, security holes will persist. Financial institutions and merchants will continue to battle global criminal sophisticates.

4. Platform integration. Many single-point mobile innovations exist, but they do not fit together seamlessly. One such app is Milo (acquired by eBay in 2010), which performs online searches for specific products in stores near its users’ location. Another app acquired by eBay in 2010, RedLaser, allows consumers to scan a product’s barcode in a store and immediately uncover the lowest price for that product, online or at nearby retailers. Some major retailers, including Starbucks and Walmart, have their own mobile apps with payment capabilities. At first glance, apps like these may seem to offer little more than convenient electronic credit cards. But an app, compared to a mobile-based website, is a more controllable, customizable handheld environment for the retailer. It enables businesses to better analyze customers even as customers gain more intelligence about products and services. With the people on both sides of the point-of-sale becoming smarter about one another, the behavior of shoppers and retailers is poised to change. As part of this transition, retailer loyalty, reward, and payment programs need to be supported by and integrated into shared mobile payment platforms.

5. Marketing data integration. Historically, for a variety of reasons, merchants have been unable to consistently and correctly link an individual consumer record directly to every payment transaction. Today, the convergence of the mobile phone, the payment transaction, and the online environment enables companies to track individual customers from the initial marketing impression all the way through the purchase. Those providers that leverage their mobile platforms for one-to-one marketing — before, during, and after a retail payment transaction — will have a leg up on the competition. They can achieve the holy grail of consumer marketing: precise marketing ROI calculations for segments of one. For example, a merchant could send a digital coupon via text and allow consumers to opt in, and then send personalized reminders only to those consumers. The merchant could then track coupon usage from mobile payments to determine the conversion rate and the overall marketing ROI.

Such scenarios hold great promise. But realizing them requires the establishment a complex web of institutional relationships. Who will track the data? Who will store the data? How will different institutions coordinate? Which standards will be used? And what emerging business models can monetize the new value creation? Not all the answers are obvious. But it is clear that traditional banks and financial institutions will find their greatest opportunity by leveraging their data. When financial institutions couple internal data with external data sources, they can begin to help merchants grow their business and provide consumers with a more personalized and robust shopping experience. The winners will convert that data into enhanced solutions across the value chain: targeted local and national offers, multifactor authentication, and security alerts.

The payment providers that stitch together merchant acceptance, mobile solution integration, and marketing fueled by data will be well on their way to success. Once that finally happens — and it will — customer relationships and marketing will never be the same.