Apple, will you do it again with Apple Pay? | Mobileum

Visa, MasterCard and American Express have been ruling the payment industry for decades with their plastic credit cards, but things are beginning to change in our digital age and they have all begun to find new ways of growing their business.  Similar to what happened when traditional wireless voice calls were challenged by Skype, new payment services have been created by a new generation of entrepreneurs. While many mobile payment systems haven’t been able to make many inroads so far, such as Google Wallet, a few have been somewhat revolutionary. For example, Jack Dorsey created Square, which has made it easy for small business to offer credit card services, and Elon Musk built PayPal into what it is today.

Because Square could potentially help Visa and other card companies by bringing plastic transactions to markets that have historically been underserved, Visa invested heavily in them. In 2011, over 27 million businesses didn’t accept Visa and MasterCard. Square helped them capture this untapped market. Additionally, Visa had years of experience it could share with Square, including helping to allay some of the security flaw allegations that have been thrown at Square in the past. 

Security, in fact, is really the space where Service Providers can add value. Since mobile payments were introduced, Service Providers have been promoting their capability to extend security to the mobile payment industry. AT&T, T-Mobile and Verizon paired up to create their own mobile wallet called Softcard, and others started to develop partnerships in the banking and payment space that would allow them to monetize the mobile payment business, primarily in emerging markets. Some of them, like Safaricom with their M-Pesa service, delved further into the value chain and provided some of the capacities that you would usually associate with banks.

The future was becoming brighter for Service Providers and their role in expanding their markets in the financial space. Moreover, OTT players become partners somehow, and not enemies; exploring each other’s synergies to gain market share.

Then, just when things were looking brighter for the CSPs and their ability to add additional value to the mobile ecosystem, Apple comes and will push to do it again. They’ve redefined how music is consumed, they’ve redefined the app marketplace and of course the smartphone itself.  Now they have set their sights on the mobile payment space with Apple Pay, which launches at the end of October. While it’s still too early to check whether it´s going to be the success that market analysts are anticipating to be, Service Providers are once again facing the same challenges they´ve faced by the time of the arrival of Apple´s Marketplace.

Once again, the same challenges for CSP´s are around the corner. Business as usual for them, the same quest to find new ways to become more than just a dumb pipe is key to keep their vital role in the future digital world.