Not a chance in hell, unless Apple are opening a bank and manage to switch everyone to it.
Visa, Mastercard... these are more like trade associations for the banks. They are effectively owned and operated by the banks, and the only reason Mastercard exists is to ensure Visa do not have a monopoly and vice versa.
Discovery, Amex... these have their place, but they are members clubs, which is to say that they have little to no penetration within the marketspace that is banking customers.
Apple are simply doing the equivalent of a PayPal using a mobile. They aren't replacing the existing payment systems, they are becoming one more intermediary in the chain. The actual billing is likely to be done by the mobile subscription service... AT&T and the like rather than Apple. All phones are getting this, not just Apple mobile devices.
This stuff also isn't new, in Japan near-field payments have existed for a long time and are taken for granted in many types of services (vending machines for example). It's just that finally this is moving westwards (eastwards if your perspective is different).
[edit]I notice the down votes, but this isn't spam or trolling it's just a different opinion. It's not even an uneducated opinion as my ex-girlfriend worked for Visa for 6 years and my current girl lived in Japan for 8 years and used near field payments there.
Downvoting just because you disagree isn't going to change the argument that Apple are inserting themselves into the payments process only superficially and that contrary to the parent post they aren't, and couldn't, move into replacing the credit card companies as the card companies are the banks.
I'm a bit excited about the advertising possibilities - I know it is a bit creepy, but if an ad company knew what I spent money on (generally), my shopping habits, and where I am, then I'd expect extremely relevant ads that would be interesting & useful.
(This is coming from someone who actually likes advertising when it's targeted)
Obviously security would be a massive thing for this - I'd see it useful for things like Starbucks, but I wouldn't really want to have it authorized for anything over say $50
Different tech (2D barcode scanned at register) and an indirect form of payment (pre-loaded card potentially linked to a CC), but Starbucks did just add national support for payment via iPhone (http://reviews.cnet.com/8301-19512_7-20029001-233.html). I'm curious, has anyone had experience (good or bad) with payment via mobile in Japan?
"Apple also could use NFC to improve how it delivers mobile ads to customers’ handsets and charge higher fees for those ads, Crone said. NFC would let Apple’s iAd advertising network personalize ads to the places where a customer is spending money."
Looks exciting, but at the same time, I am not sure if Apple is the company I want to have as the pioneer of this type of service.
I would certainly not welcome payment terminals that accept ONLY iOS devices, and from the article, it looks like they are doing exactly that.
I can't read the article, because the Bloomberg site, in its infinite wisdom, shows me the mobile homepage. By the headline alone, it sounds like bad news for Square.
The article mostly talks about a supposed confirmation by some analyst person that Apple will add NFC support to the next batch of iOS devices. The payment service seems to be basically conjecture. If the part about NFC is true, and especially if it is a 3rd party accessible, programmable NFC system, it could actually be very, very good news for Square - that would make things like phone to phone payments possible, it would make it possible to read those new Visa and Mastercard contactless credit cards, and so on.
Maybe I'm misunderstanding Square's business model, but I think it is more of an opportunity for them.
The NFC lets people with iphones make payments. Square's dongle lets people take payments. Square could make a new dongle that receives NFC signals and runs it thru the payment processing backend to let people take payments with their phones, the way they do for credit cards.
If Apple wants wide adoption, they will have to make payment taking an open opportunity, because there are so many different situations where people take credit cards now. So Square could plug into that, and would be competing with Apple to provide payment reception hardware and sofware to retailers-- which is the kind of competition Apple really likes, because Apple is in the platform business, rather than the "selling low volume terminals to retailers" business. So, I think Square will be able to plug into Apple's platform, just as they plug into Visa's platform now.
Square is doing the opposite thing, letting you receive payments from a credit card to an iPhone. This would be letting you send payments from an iPhone to some other device.
I remember this once being attempted 15 years ago or more in Norway, except with Nokia phones and the biggest (former state-owned) telco. Ignoring for the moment the obvious vendor lockin, it was a disaster anyway.
It suffered the same problem this one will: No added benefit over cash or credit-cards which people already have. Not to mention shops had to replace their payment-equipment and opt-in for this for little perceived extra value and there was really, really no market demand what so ever.
So as a consumer you had two choices:
1. Take up your bank-card, enter-security code and be done.
2. Or ask if you could pay with your "phone", and if you could then pick up your phone, see that it said the same as the display on the counter, enter a security code and then get your bank-card charged. If not, see step 1.
Can anyone see why this wasn't successful? Can anyone see why this would ever be successful? What does adding the phone into the mix add of value?
I'm not saying that this can't possibly work or will never happen, just that it's been tried before and the main reasons it didn't work back then haven't fundamentally changed in any significant way, except more people now have bank-cards and credit-cards further undermining whatever reason it should have to gain traction.
If this thing takes off just because it's an Apple-thing/iThing, I will be amazed by people's gullibility.
What if it takes off just because it's well-designed and customer focused, like most things Apple?
Are people really gullible, or are you bad at understanding what makes technology take off? I mean, just consider the options here; either millions of people are gullible and will jump on to anything called "iSomething" -- or, you're not that good at understanding what makes technology approachable and useful for most people.
For reference: the lower-case i in the name of the iPad is not what made it take off. It's that for the first time, someone made a well-designed purpose built tablet.
What if it takes off just because it's well-designed and customer focused, like most things Apple?
I've had both an iPod and an iPhone. I'm not scoffing at Apple's ability to deliver.
However a very real thing is some people's attitude towards Apple being some kind of tech-God which cannot do anything wrong. They will praise anything they do (since Apple is now a status-symbol and they want to promote the status of their owned Apple devices) and apologize for any shortcomings or try to hide them under the carpet. That was what my remark was aimed at.
Now back to the point. If you read the article and see what is being envisioned/promoted you will see that it's the same thing all over again: Mobile device set to replace credit/debit-cards.
And ask yourself: If you need to make a payment, regardless of shiny UI and polished product finish, what will be simplest and most practical? A tiny card + PIN code or a freaking iPad with a soft keyboard and an complex, alpha-numerical iTunes-password?
Just trying to picture the iPad-payment scenario in my mind turns into comedy-sketches about the tech-stupidity and hype running wild. Actually I'm seeing this very vividly as a SNL skit.
It will not be elegant, it will not be practical and it will not be better than what we have already. And in the end, it will charge the same credit-card you could have paid with in the first place.
