Apple Pay: Was Innovation or Repetition

What has been transformed in the markets by existing and new companies is their emergence to capture available opportunities. While mobile money or FinTech’s banking often gets described as a money transfer product, the reality is much beyond that. This has a blend of big data, data science, AI, and machine learning built in.

Apple PayNFC-based mobile payment services were positioned as strategic services to drive demand for products other than payment services. Mobile money as a network-operated platform for financial services is playing a huge role in many economies. Like in the past, the emergence of new services and infrastructure (bridges, railroads, electricity, telecommunications, the internet, etc.) has had profound effects on human livelihoods. New ways of moving people, goods, services, technologies, reliable energy, or access to information can lead to waves of innovation. This post was originally published on September 26, 2014, on LinkedIn. Apple Pay – Innovation or Repetition

Mobile Payments Transformation

What has been transformed in the markets by existing and new companies; the emergence to capture available opportunities. While Mobile Money or FinTech’s Banking often gets described as a money transfer product but the reality is much beyond. This has now blend of big data, data science, AI and machine learning built in.

AP_bklMobile money was an MNO-based service for storing and moving money by facilitating the exchange of cash and electronic value between various actors ranging from registered subscribers, businesses, the government, and other financial service providers. Let’s have an elaborate discussion on the money transfer system and the mobile payments ecosystem, of course, with a touch of AI.

Apple’s (as per news, 10 million handsets were sold in the first 3 days) launch of Apple Pay (an NFC solution) from a technology perspective is neither a new offering nor a game changer. Without a doubt, this launch will set a trend for NBFTC (non-banking financial and technology companies) on how to enter payments and the so-called banking domain and eat the share.

Unlike most of the MNOs, which keep on focusing and growing the mobile network in a positive way to penetrate these, or I can say isolated, areas, millions of people are now able to connect via a mobile phone. As a result, mobile money has become a viable alternative to traditional bank accounts. The mobile payment relationship between the major banks and Apple is, to put it mildly, a delicate one.

Different Handset Models

If we compare the underlying hardware on handsets (like to like, apple to apple), the Nexus-4, which was released in November 2012, was exactly the same in terms of specification, and most of us must have seen Facebook posts as “Welcome to 2012,” and Japan’s FeliCa calls it “Welcome to 2004,” as they did all (payment through NFC with fingerprints as signatures, pulling money from credit cards, and supported with a wristwatch) that is claimed by Apple now in June 2004 for Japan, and it’s still running very well even though this technology is still unavailable to most users. As a result, only tech-savvy early adopters have embraced NFC to date.

Ultimately, the adoption of a de facto standard and the introduction of user-friendly NFC applications could enable the technology to cross the chasm and gain traction with the early majority, with Apple trying to enable NFC-based mobile payments to cross the chasm. On the contrary, moving away from the Americas and Japan and looking at Africa, according to ITU (International Telecommunications Union) news, 20% of the adult population in Africa does not have formal bank accounts, making mobile money an effective alternative.

Thanks to mobile money products, secure and reliable financial management options are now easily accessible. For example, governments, especially in sub-Saharan Africa, are using mobile money to pay pensions and grants.

Apple’s move has the potential to vastly increase mobile payment revenue, which would create a potentially highly lucrative market for banks. But the precise details of early negotiations have the potential to color the nature of those deals for years. As the smoke clears from round one, it appears that the banks chose to start by playing this game the Apple way. The rise of mobile money, particularly in developing countries, is set to skyrocket, but that doesn’t mean that traditional bank accounts will become obsolete.

Mobile Payments and Banks

Rather, mobile money and formal bank accounts will work side by side (they have to if banks still need to survive), with many people making use of both simultaneously. While payment methods like checks may become obsolete, traditional bank accounts will still serve a purpose. Bear in mind that mobile money products are actually owned and operated by banks or affiliated with them in some way.

The New York Times has reported that Apple Pay could threaten some revenue streams for banks and CC-N (Credit Card Networks), as the technology giant looks to assume a more central role in the financial universe. The eager participation of banks and card companies suggests both

Apple’s clout and the recognition among financial institutions that they face broader challenges from upstart technology ventures, many of which are not as eager or willing as Apple to work with the incumbent financial industry.” The article quoted James Anderson, the senior vice president for mobile product development at MasterCard, saying: “There are schemes that don’t respect and honor the payment networks. We want to invest in programs that respect our role in the ecosystem.”

The article further stated that banks are hopeful that they will make up for the lower rates by processing new types of transactions that are currently being done with cash or other payment methods. The big CC-N will not have to pay any costs for working with Apple. But some analysts warned this week that Apple Pay could, in the long run, push down the rates that both credit card networks and banks can charge merchants.

The security of your files and customer data is in another company’s hands. Banks and other issuers should be working with approved vendors by the main card associations that are compliant with EMV, PCI, and other major payment standards, but normally this does not happen.

Plastic Cards & Apple Pay

Credit card fees are largely used to cover the costs of fraud, which are expected to go down with Apple’s fingerprint signature. (New York Times). Rapid advancements in mobile technology are changing the way we live, from the way we connect with others to the way we manage our finances. Technological innovations have made certain aspects of our daily lives that much easier. The advent of mobile money has given those who were previously unable to conduct monetary transactions an easy and affordable alternative to traditional bank accounts.

  • Innovation
    Is it wrong to say “banks have been caught asleep on the wheel in the digital age”? Most likely not, hence the birth of FinTech and the responsibility of building the online, cashless, and mobile payment services that are top of mind for consumers today.

    • On mobile, more people default to social media, MNO’s mobile payment services, etc., to transfer money to families and friends rather than a bank app. Open innovation is at the heart of the digital revolution, but the bank said, “No way, i.e., do it my way”.
    • Fintechs took this forward and got it, engaging as an external technology solutions provider with immense knowledge. Cheap capital came as free raw material for fintechs, and resources that were waiting for this kind of golden opportunity just jumped on board.
  • Collaboration.
    Creating new opportunities through strategic and network alliances, traditionally financial services incumbents have partnered with others in their own industry—especially to share processes or services considered “non-core,” which help all collaborators reduce their costs or create new market opportunities.

    • Without serious threats of disruption, most banks have focused on consolidating to drive down costs and cross-sell services, placing customer-facing product experiences on the back burner.
    • Yet collaboration will need to go a step further in the future to build ties with those in different industries and outlooks and identify new ways to generate value.
    • Collaboration between incumbents and new players will be essential to fully comprehending the effects (both positive and negative) of technological developments on the industry’s risk profile.

The ‘unbanked’ were essentially stuck between a rock and a hard place. They needed money to travel to the bank, but without any way to receive their wages or subsidies from the government or employed family members, this was an impossible task.

The objective of digital payment is to assess the user-friendliness, trust, and the user’s view on the current and future authentication methods of cashless payments and to understand ideal payment solutions. The economic barriers are also disappearing, though a substantial additional investment in equipment and cards would be needed to permit even purchases such as soft drinks to be made. But transactional privacy will be at the heart of the government’s attack on digital cash.

Food For Thought

In the near future, we can expect contactless payment to become prevalent in various industries, such as retail, point-of-sale terminals, and taxis. However, this will also lead to a significant reliance on cloud-based solutions, which could potentially have drawbacks.

Points to Note:

All credits, if any, remain with the original contributor only. We have covered all the basics around data models and the importance of quality data and training data. In the next upcoming post, we will talk about implementation, usage, and practice experience for markets.

Books + Other readings Referred

  • Research through open internet, news portals, white papers and imparted knowledge via live conferences & lectures.
  • Lab and hands-on experience of  @AILabPage (Self-taught learners group) members.

Feedback & Further Question

Do you have any questions about AI, Machine Learning, Telecom billing/charging, Data Science or Big Data Analytics? Leave a question in a comment section or ask via email. Will try best to answer it.

Sign-tConclusion -: In wrapping up this piece, my recurring inquiry remains: what is the final destination and direction in the ongoing advancement of mobile payments? Enhancing what already exists to discover untapped potential is a practical approach. Before the advent of mobile financial services, a considerable number of individuals in developing nations faced the challenge of accessing formal banking services. Due to the inadequate infrastructure coupled with low salaries, access to banking services was unattainable for many millions of individuals.

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Posted by V Sharma

A Technology Specialist boasting 22+ years of exposure to Fintech, Insuretech, and Investtech with proficiency in Data Science, Advanced Analytics, AI (Machine Learning, Neural Networks, Deep Learning), and Blockchain (Trust Assessment, Tokenization, Digital Assets). Demonstrated effectiveness in Mobile Financial Services (Cross Border Remittances, Mobile Money, Mobile Banking, Payments), IT Service Management, Software Engineering, and Mobile Telecom (Mobile Data, Billing, Prepaid Charging Services). Proven success in launching start-ups and new business units - domestically and internationally - with hands-on exposure to engineering and business strategy. "A fervent Physics enthusiast with a self-proclaimed avocation for photography" in my spare time.


  1. Ken Corsar at

    Great read, makes me think of my old Blackberry Bold 9900 (purchased in 2011) which had NFC capacity – at the time I remember thinking what use id this as no entity offered a linked service to it – no bank or other services. So Apple isnt really an innovator.


  2. Repetition with no intelligence …… but they used there muscles to relaunch old technology as new and innovative.


  3. Fintech Technology at

    This was just a use of technology lying on table unused ….. hats of to them as they woke up the world


  4. tawanda at

    I like it what ever it is


  5. Charlene at

    I just love apple


  6. Vani Sharma at

    I just love devices


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