In the beginning was PayPal: a digital payment system, designed for digital. So simple to use and so revolutionary that more than a quarter of all e-commerce worldwide passes through it.
For many years PayPal has operated in a virtually undisturbed environment but things are changing today. There’s excitement in the payments segment and many successful (and unsuccessful) companies are trying to evolve their business models to grab a piece of that profitable and strategic market. Among these, Apple’s move has not been tracked, with the introduction of Apple Pay. Although Apple has introduced it as a payment system, it is clear that, from the initial design, it is a product designed for totally different purposes: to replace our portfolio.
No more having a materialized wallet means having all our documents, credit cards, loyalty cards, public transport subscriptions and anything else we have in our pockets at all times and without any risk of being stolen. It means getting users used to a stop solution that allows them to pay, accumulate points, travel and declare who we are. One day not far away, in fact, probably, our passport will not have more pages or cover.
Apple could have launched Apple Pay in digital version right away, competing head-to-head with PayPal, attacking e-commerce. Instead, it chose to wait and launch in the first instance only the physical payments fisici. A choice that betrays the fact that Apple Pay has much greater ambitions than winning digital payments. The move was wisely made to try and get consumers used to using Apple Pay in their everyday lives instead of credit cards. Only later was the digital version launched to pay online, a move that logically would have seemed counterintuitive: it is in fact difficult to generate adoption digital tools on the web, let alone offline in stores.
And not just stores. To increase the frequency of use of Apple Pay and the user base, Apple relies on transport.
Already today at London you can pay for public transport tickets through your Apple Watch or iPhone. So a consumer, as he enters the subway with his mobile phone in his hand, can bring his phone closer to the subway turnstile and, with a tap, cross it.
Apple believes so much in this model to increase the adoption of its service that it has added to the iPhone a chip for extending its wallet, Apple Pay, to the railway system of East Japan Railway Co hoping to take a good part of those 17.5 million consumers who every day take public transport in Japan.
Apple Pay, despite being disguised as a mere payment system, has the ambition to replace our portfolio and to contain, in addition to cash, also documents, loyalty cards, business cards and whatever else we have more expensive. Dematerializing the users’ wallets means taking possession of the most intimate things we carry in our pockets: our data and our habits. Apple Pay aims to control much more than the consumers’ wallets: their identity..