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Today, Apple finally rolled out its long-promised mobile wallet – officially known as Apple Pay.

When Apple released the iPhone 6 and iWatch last month, most of the buzz focused not on the gadgets themselves, but a feature made standard on both: the ability to not only make payments with your mobile device (as opposed to a credit or debit card), but to make payments that are supposedly more secure than traditional American credit card purchases, thanks to the process of “tokenization.”

Of course, for Apple Pay to prove as successful as Apple wants, two different things must happen: large numbers of customers must want to use Apple Pay when making purchases – and large numbers of merchants must be willing to accept Apple Pay. From Apple's perspective, that second hurdle might prove harder to overcome than the first.

The Wall Street Journal noted on Monday that “Many retailers — including the nation’s largest, Wal-Mart Stores Inc. — aren’t part of Apple’s network. Only a minority have machines capable of reading the near-field communication radio signal that makes Apple Pay work. And only Apple’s newest phones, the iPhone 6 and iPhone 6 Plus, include the technology.”

Too early to say

It's far too early yet to predict whether Apple's mobile wallet will prove to be the Next Big Thing, or fizzle out.

Even the business media is divided: on Oct. 17, Bloomberg Businessweek reporter Kyle Stock wrote an article explaining “Why retailers will love the Apple Pay era” (short version: for the same reason most retailers already accept credit cards despite the swipe fees they must pay, and most casinos require gamblers to buy chips rather than bet cash – because the common psychological phenomenon known as “decoupling” ensures that most people, regardless of how intelligent they otherwise are, simply do not view betting a $20 casino chip or putting a $20 charge on a credit card as being identical to spending $20 in actual cash, even though such actions have identical results where your net worth is concerned).

So one Businessweek analyst thinks Apple Pay will be a rousing success with retailers for the same reason they adopted other consumer “decoupling” technologies, such as credit card payments.

Then, today, another Businessweek analyst, Joshua Brustein, explained that “Apple Pay is too anonymous for some retailers” who are “are less than thrilled about Apple’s anonymous infrastructure.”

Useful data

Short version of why: thanks to credit cards and other longstanding non-cash payment options, retailers already have ways to take advantage of consumer decoupling, with the added bonus that accepting credit or debit card payments enables these retailers to collect lots of potentially useful marketing data about you and your buying habits. Apple Pay, by contrast, “won’t collect information about what people buy — and it’s designed to ensure no one else can, either.”

So from a merchant's perspective, Apple Pay might arguably be merely a less-useful version of an already-existing payment system, with the added downside that the merchant can't even take advantage of this less-useful system without first spending money to acquire the equipment for it.

Indeed, in mid-September, Walmart, Best Buy and other major retailers were quick to announce that they would not be accepting Apple Pay (though other major companies, including CVS, Walgreens, McDonald's, Bloomingdale's, Macy's and Whole Foods, said the opposite). Many of the merchants forgoing the Apple Pay options said it's because they are working with a retailer-owned group called the Merchant Customer Exchange to develop a competing mobile payment option called CurrentC, expected to be released next year.

Unlike Apple Pay, the downloadable CurrentC app will be usable on any Android or iPhone, not just the newest Apple products, and it will not require merchants to invest in specialized checkout scanners the way Apple Pay does.

One thing does seem certain: the era of widespread mobile payment options is almost here. The only question is which option will be the first to dominate the market: Apple Pay, CurrentC or something which hasn't even been developed yet?


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