At this point of time each year, the tech horizon glitters with a congregation of rising trends and fads. Along with other strong contenders this year, Apple Pay, NFC, and wearables are hotting up the scene. But the question is; will the trio be able to live up to the hype? Or will the excitement melt away after the next 12 months? Let’s check it out without scratching our heads.
With an official announcement in the penultimate quarter of the previous year, Apple has joined the digital billfold fray. It’s version of the service is called Apple Pay. True to its nature, the technology leader has launched it on a grand scale by teaming up with three dominant card issuers, six major banks, and over 200,000 retail partners including biggies like Walgreens, Bloomingdales, and McDonald’s. The service enables owners of iPhone 6, iPhone 6 Plus, iPad Air 2, and iPad Mini 3 to chuck traditional plastic cards overboard and pay with some taps instead. It will also work on devices compatible with Apple Watch scheduled to hit the market soon.
Basically, the application is built around chip and pin technology and integrates three main components: NFC, biometrics, and tokenization.
Financial-services firms that are on board are promoting this mobile wallet via their respective commercials. As per the early information pouring in, response to the service is not something to be frowned upon. ITG Market Research estimates that at the end of six weeks after its roll-out, Apple Pay has successfully garnered a 1.7% share of the mobile payments pie. Data compiled by Business Insider reveals that of all the transactions at top five retail locations in the month following the release, payment for 0.1%-1.6% has been made using Apple Pay.
So far, so good. But, whether this initial pace can be sustained in the coming days is important, given the kind of fate similar services like PayPal, Softcard, or Google Wallet are suffering due to shopper disinterest. Replying to a creditcards.com survey, a shocking 44% of respondents have said they will never opt for mobile payment through phones. To find a smooth escape from this partially glum situation, the Cupertino-based leviathan has to fix attention on certain matters.
As far as consumers are concerned, some real incentives can sway their opinion in favor of Apple Pay. These may come in the shape of freebies, in-store coupons, loyalty points or other promotional offers. Apple has to realize that the business of payments is volume-intensive, not a niche playing field. Hence, to mainstream Apple Pay, eventually, it has to reach out to people who can’t afford an iPhone 6-like high-end gadget. Again, to increase compatibility, it has to accept more payment modes. Finally, amid the spike in data breaches, there’s absolutely no room for laxity in securing the service.
Strictly speaking, NFC, a short-range contactless communication technology, is not an emerging phenomenon, rather a mature one as its ancestry traces back to a decade. But surprisingly, proliferation has been on a slow clip. Riding on the mobile payments wave, NFC is back with a bang. New uses for this technology are being actively scouted; in some areas utilization has already started.
Many companies that want to stay on the bleeding edge are using smartphones with built-in NFC chips to monitor employee attendance, share documents, and control access to parking lots and cafeterias inside their premises. Brick-and-mortar retailers are using it to link the payment part with digital coupons and loyalty schemes. Further, they can use NFC tags to allow shoppers automatic sign-in on popular social media outlets for airing views about the in-store experience. In the government sector, NFC is improving citizen-centric facilities. For instance, NFC-enabled devices are helping people pay for commuting in a public transport system or step into public buildings like libraries. Among more innovative applications, NFC is poised to toll the death knell for paper tickets at events.
So, is the road ahead as smooth as it appears? Well, just a lone stat is enough to break the dream. In the US, only 2% of retailers have the infrastructure to support NFC. Though with small steps, things are moving now. It is expected that, as retailers are falling in with the EMV platform, in 2015 the movement will be solid on. Berg insights predict that in 2017, 86% of the point of sales in North America will be NFC-ready; for EU and rest of world, the respective figures are 78% and 38%.
Wearable, the concept that tries to blend the elegance of fashion with the precision of technology, is all set for a great performance in 2015. In fact, as Credit Suisse anticipates, market for wearables will shoot up tenfold from the current $5 billion to $50 billion in the next 3-5 years. However, what needs to be watched is how wearable technology is going to evolve this year, both in terms of functionality and aesthetics.
Until now, wearables have essentially meant smart watches (Samsung Galaxy Gear or Asus ZenWatch), fancy eyewear (Google Glass), and some fitness bands (Fitbit). Start-ups having the zeal to disrupt fashion electronics are offering attractively featured products that can serve consumers’ practical purposes. Dutch fashion designer Pauline van Dongen has created a special line of garments named Wearable Solar that comes with solar cells fitted and can charge smartphones. Redmond, Washington-based start-up Sensoria Inc. has launched a smart sock that works with an anklet and helps wearers to ditch injury-prone running postures. Enterprises are also seeing wearables as a promising proposition. From taking timely decisions to minimizing waste to increasing workforce efficiency, the technology can do wonders for them.
Signs are clear that the wearable arena will be humming with activity in 2015. Hence, uptake might well zoom past expectations.