Apple's entry into the mobile payments arena has that business and moved the possibility of cashless mobile payments closer to reality.
Cashless transactions at physical stores have been the subject of plenty of talk, but predictions have yet to become widespread reality, as mobile payment products have so far fallen short of consumer and business acceptance. Products from other companies, such as Google Wallet, limited by the types of phones or cellular services they could work with, have so far failed to gain significant traction.
The overwhelming majority of e-commerce spending is done through desktop computers since it's easier to enter payment information on a desktop than a smartphone. Mobile devices were used for just 11 percent of e-commerce spending in the second quarter, The New York Times
reports, citing data from research firm comScore.
That could change with the roll out of Apple Pay. Apple Pay could do to mobile payments what the iPod did to music and the iPhone did to cell phones.
"It used to be the case that the Internet was kind of the Wild West," says John Collison, co-founder and president of Stripe, a payment processing startup working with Apple, according to The Times. "Ten years ago, people were scared of checking out on random websites. Now, consumers are no longer unfamiliar with online commerce.
"Apple Pay is good for everyone in the payments ecosystem because ultimately, it increases the amount of transactions that are happening on mobile."
boasts its service, to be available in October, will offer easy, secure and private payments. Consumers will use the iPhone's Touch ID fingerprint reader to confirm identities and won't have to open any apps. Apple won't save transaction information, so the data can't be tied back to shoppers.
The introduction of Apple Pay has also made a huge impact on the mobile payments industry. Most significantly, it helped prompt eBay to spin off PayPal so it can more nimble in the increasingly competitive sector. As the dominant e-commerce payment player, PayPal probably has the most to lose from Apple's potentially disruptive entrance.
"The industry landscape is changing, and each business faces different competitive opportunities and challenges," says eBay President CEO John Donahoe
"eBay and PayPal will be sharper and stronger, and more focused and competitive as leading, standalone companies in their respective markets. As independent companies, eBay and PayPal will enjoy added flexibility to pursue new market and partnership opportunities."
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