Tim Cook, CEO of Apple, has described the response that Apple Pay has received from those retailers aligned with MCX as "a skirmish". If that's the case it's surely the first of what will be many such battles in the mobile payments space for Apple. As things currently stand, it's far too early to say who has the upper hand, but however things work out, the real winners should be the customers.
Certainly Apple shows no signs of being seriously wounded by the early MCX CurrentC ambush and has potentially strong allies to call to arms. But while the current headline-grabbing conflict is limited to America, it is only a matter of time before the rest of the world is involved. The Mobile Payments wars will be global, not local, and they will involve far more players than the two US protagonists currently battling.
So, now I've exhausted all the war puns I had in my locker, let's look at some of the early results. First of all, Apple can be relatively pleased with the early signs in the first 72 hours of its launch. As we know, Apple Pay is limited to the US at the moment and only to owners of iPhone 6 models or an Apple watch. Yet still, Apple Pay activated some one million cards in the first three days of its launch. Unsurprisingly, that is an unrivaled adoption rate for a new mobile payment platform.
Apple might have had the setback of MCX aligned retailers refusing to facilitate their payments, but the PR of such a move has overall been positive for Apple and negative for MCX's CurrentC offering. Customers who want to pay via mobile payments but can't currently - not because the technology doesn't exist, but because retailers refuse to turn it on - are not going to be impressed. There are probably a few retailers aligned to the CurrentC project who now regret signing exclusivity deals a year or two ago.
Apple Pay's head start on the competition and Tim Cook's words are all good signs to me, but perhaps Apple's ace in the hole, is the potential partnership with Chinese power house Alibaba. The e-commerce company has more than 300 million users across Asia and handled some $200 million of transactions last year alone. Apple has had trouble expanding into the Asian market, and China in particular, with security cited as a major stumbling block. A partnership with Alibaba could give the company the credibility it needs in China to expand its market there, and likewise for Alibaba and its operations in the United States.
For all my talk of War, in reality the Mobile Payments market is so big no one player is going to "win". As Tim Cook says, the early moves to block Apple Pay are just a skirmish. Once CurrentC is up and running, I would be surprised if retailers held off from accepting whatever payment method their customers would like to use. It's an old adage but true: the customer comes first. In the long term, limiting customer options and freedoms will damage business. That's why at Ensygnia, on our agnostic platform, we are as flexible as possible to which payments are accepted.
By Matthew Taylor 29th October 2014
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