Walmart and Best Buy Opt Out of Apple Pay – Required Point-of-Sale Upgrades
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A few stats (from http://www.statisticbrain.com/wal-mart-company-statistics/): Wal-Mart, as a country, would be the 19th largest economy on earth. Of every $1 spent in the US, $0.06 goes to Wal-Mart. There are 100,000,000 shoppers in Wal-Mart every week.
NFC needs to become the way you expect to pay for things. Otherwise, it's Passbook -- that thing you vaguely remember that your phone can do, but that you don't really use, because in the time it takes to figure out if you can, you could just swipe your card.
If anyone's going to push it mainstream in one big push, it will be Apple pairing it with new iPhones. But it's not a given that that's the way it plays out, and every large retailer who pulls out is important.
Apple here is trying to get into processing payments for your groceries, food and clothes. I'm not sure you've thought through what the statistics are saying.
Every dollar in the US counts payments like mortgage, car, student loans, etc. These are not only high dollar items that make up a huge percentage of most people's monthly expenses, they don't add up to a large frequency. These high dollar low volume payments in effect totally negate the value of looking at Walmart's influence from a percentage of the total US dollars spent.
A quick google tells me Walmart has 11% of the us retail market and an estimated 18% of the grocery market, however again this is not a good indicator of their overall size of pos transactions, it does indicate that their numbers are likely better than 6%.
18 percent of all (national) SNAP sales are conducted at its stores—about $13 billion annually
http://www.slate.com/articles/business/moneybox/2014/04/big_...
Then 18% of all SNAP sales seem incredibly reasonable given they make up 18% of the US grocery market.
Even without that stat, this has always struck me as a substanceless, emotional argument. If you have a program to give people money to go spend on groceries in grocery stores, then they're going to use that money to go spend money in grocery stores.
If you're super concerned there might be a margin on those products, then what's the alternative solution to whatever the stated goal of SNAP is?
I guess you could always scrap SNAP and create government farms and bakeries or something. That could never be less efficient or have any unforseen side effects...
I do not believe you. How can that possibly be true?
This is the sort of thing that More or Less should look at http://www.bbc.co.uk/programmes/b006qshd.
Tesco turnover is £63bn, UK GDP is £1550bn, so it is 4% of GDP, which is equal to total expenditure.
Your house is misleading, as assuming you borrowed the money, that is other people's deferred expenditure (saved money) which you will pay back later, so that nets out when you pay the money back.
http://www.telegraph.co.uk/news/uknews/1548742/1-in-every-se...
1. Y = C + I + G + (X − M) .
2. but C is 250838 GBP Million in the first quarter of 2014, 249105 GBP Million in the fourth quarter of 2013. so C is around 1 billion.
Oh, and on second thought, maybe it would have been better to say "through" Wal-Mart. They're not making 6% of the all the profit obviously.
1) Android has had cardless payment for 2+ years now via Google Wallet. That being said, Japan has had similar technology for way longer. While the marketing machine that is Apple made sure to let everyone know how magical/revolutionary/awesome/brilliant this form of payment it, Apple is late to the game. Similarly, other products such as Softcard/ISIS exist too from non-smartphone companies. Thanks Apple for finally catching up.
2) Apply Pay will, however, finally give cardless payment the push it needs. Apple has the market power to get retailers to start (read: more than rarely) embrace this technology (for example: Passbook & tickets). That I can fully support Apple for as the iPhone is the single best selling phone and will get NFC into the hands of millions very, very quickly. And with the volume of devices + Apple's marketing of Apple Pay = great news for payment.
Additionally, Google's implementation requires the transaction transit their infrastructure, Apple's does not. They don't even know the transaction occurred.
Yes, they're not technically first, but the two systems are not identical.
Personally, the less a large corporation knows about me, the better.
It has been quite clear for quite some time that mobile payments was not a technology problem but a policy problem. The technology was not just ready for it with the release of the Nexus S - it was ready for it for years before that! The problem was getting people to actually use it. Since most vendors were trying to use mobile payments for their own short-term gain, things were going nowhere.
Apple has not "caught up" in that sense at all since they weren't behind in any meaningful way. There was no important reason for smartphones to have NFC as there did not exist many use cases for it without payments. Although I had high expectations of NFC when I bought my current Nexus phone two years ago, things simply never got off the ground in that area.
The contribution that Apple Pay makes to the market is quite unique if you look beyond technical merit. It provides an intuitive user interface for anyone's payment product for use in mobile phones. It isn't tied to your prepaid Google Wallet card, it isn't tied to your SIM card, and it isn't tied to propietary point of sale hardware. Furthermore, it is being pushed
I'd argue that Apple is the only one with the required leverage to push something like this into a market obsessed with conservatism and self interests. They have the power to convince shops and banks to cooperate with it, moreso than Google. Moreover, because they have their own hardware, it is easier for them to integrate a secure element and a user-friendly authorization method (the fingerprint scanner) to have an integrated solution.
It's not as if Apple has reinvented the wheel or anything, and I hope nobody is claiming that. But their execution of this idea seems very good. And it is the execution of the idea, your second point, that is the important part here. I hope that Google can fight off its own and carrier interests, and follow suit with a similar application. Many Android phones already possess all required hardware.
And because they aren't trying to be a payments company, VISA etc aren't threatened and therefore will cooperate or even favour Apple. Apple is just a POS machine manufacturer.
Regarding the "Google did it first" part - the devil is in the details. ApplePay will provide secure card less transactions while maintaining customer privacy - apple won't know (and don't care based on comments from eddie cue was it) what you are buying or from who.
With google wallet the worlds biggest information gathering ad delivery company gets a complete record of what you buy, when, from who, for how much, how often etc.
I know a lot of the tech industry treats google like some kind of benevolent uncle who can do no wrong and has nothing but good intentions, but for some people privacy still carries value.
Given that google wallet only works in the USA 3 years after it's launch, I don't really think its anywhere near to a competing service in the grand scheme of things.
I get that it would be different if/when we standardize on it across the board. But I don't see that happening soon, either.
Google's "solution" to this is Google Wallet Card, which is a physical MasterCard Debit Card. How popular this is I have no idea, but I wouldn't be surprised if people who willingly hand over their transaction history to Google would also think its rational to use a google supplied card instead of their own card sitting right next to it in their wallet.
However, it's also not quite the wild-west of implementations that you imagine.
All the major credit card systems for contactless payments, are an implementation of https://en.wikipedia.org/wiki/ISO/IEC_14443 - of which NFC is also a compatible implementation.
Australia (and I suspect Europe) has had Visa PayWave/MC PayPass for a number of years - PayWave/PayPass POS terminals are very common in shops.
That the POS systems are not common in the US right now is no different to GSM not being common in the US when the iPhone was launched. America just seems to be particularly bad at implementing broad community affecting changes - and extremely bad at anything to do with banks it seems - like this, until they're dragged kicking and screaming into it.
I suspect that once Apple starts organising the B2B arrangements (i.e. dealing with banks) the rollout of ApplePay in the rest of the world - particularly "1st world" countries - will be phenomenally quick compared to in the US.
Eh, I think there are a couple of things at work here.
First, I'm still not convinced there's a really compelling advantage to contactless payments from a convenience perspective. I still have to pull a physical token out of my pocket, and given I only use a couple of cards regularly, I don't really care if that token is a card or a phone.
Next, when you start talking anti-fraud, I think there's a reason that the push for that had to come from the payment processors.
From a consumer perspective, there's absolutely no good reason to care. Credit card fraud liability is one area where the US has incredibly strong consumer protection laws. If my credit card information gets stolen ala the Target breach, I'm not legally liable for any charges resulting from it. The most painful thing I have to worry about is disputing the charge and getting a new card issue. That's not a big enough deal to generate consumer demand for more secure payments.
Merchants have a bit more reason to care since they're usually the ones that get stuck with fraudulent charges, but it becomes a matter of whether occasional fraud is more expensive for them than upgrading all their POS equipment. The answer from Wal-Mart and Best Buy appears to be "no," and I know it's a pretty common sentiment among small business owners who often hate any spending associated their merchant accounts.
So that really leaves the processors as the ones who stand the most to gain from this. I don't see why it's surprising that the push had to come from the supply side as a result.
My phone is going to be a lot quicker to grab than my credit card, and this way it has better security.
As much as you say consumers don't care about security I still think some people will use this where they wouldn't use plain paywave because it's more secure.
Do I need another middle-man between me and my money expenditures? Nope. I already have trouble with Amex being overly secure and blocking my purchases at certain sites and locations.
A lot of people are comparing Google wallet and apple pay like they are the same thing - they are not. A phone with compromised firmware could leak sensitive data with Google wallet but not with Apple pay.
NFC has that "secure element" thingy, that is, a TPM, like a SIM card. Implementations may vary. I'm unaware on actual Google Wallet NFC implementation, but I heard rumors (which are not certain by any means) at least Samsung had some hardware-assisted keystore. And I doubt Visa or MasterCard would permit Android vendors to do things on a phone's base OS a manner that could be exploited with a software hack.
The current implementation of Google wallet stores your card details in a google server which protects against these attacks but is not a viable business model (google are making a loss on every transaction since they pay it and then bill the customer themselves).
But is a disruption of mobile wallets vs credit cards even possible ? Why would a 19-year old college student prefer it ... or why would a 30 year old professional switch to it over credit cards ?
All the contactless systems Visa/MC/Amex are deploying in the world are variants of PayPass/PayWave which are all based on an international standard and will work no matter what. The article djhworld linked to is talking about how users in the UK won't be able to add cards to Apple Pay because Apple doesn't have any deals with UK banks. If you go visit the UK and have an already-enrolled Apple Pay account, it will work at contactless terminals.
Apple Pay probably won't arrive here until next year and even then I doubt many retailers will take up on the offer http://www.independent.co.uk/life-style/gadgets-and-tech/app...
> Apple Pay works with most of the major credit and debit cards from the top U.S. banks. Just add your participating cards to Passbook and you’ll continue to get all the rewards, benefits, and security of your cards.