This week, The Wall Street Journal editor-in-chief Gerard Baker interviewed Apple CEO Tim Cook on a number of areas including the Apple Watch, Apple Pay and most interestingly a potential hook-up with Jack Ma’s Alibaba. Full video footage is yet to be released but RepriceExpress can offer you an insight into the best bits.
World’s Third Largest Payment System
Alibaba Group Holding Ltd., recently raised $25 billion in the world’s biggest initial public offering (IPO) and with Alipay it has the third largest payment system in the world behind Visa and Mastercard. Alipay, handled $200 billion in payments last year; in comparison, eBay’s Paypal processed $180 billion in 2013. Alipay has an estimated 800 million customers in China and accounts for 70% of China’s online transactions.
Apple Pay
What is Apple Pay? iPhone 6 and 6 Plus owners can now pay for goods at payment terminals through a wave of their smartphone and their thumbprint. Within the first three days of going live, Apple Pay activated over one million credit cards, making a big statement in the world of digital payment systems much to the delight of Apple CEO, Tim Cook who boasted, “We are already No. 1. We are more than the total of the other guys. We’ve only been at it a week. I feel fantastic.”
Partnership Opportunities
When asked about a potential partnership with Apple Pay, Apple’s new mobile payment system, Jack Ma declared it was something he was interested it. Tim Cook said, “If we can find some areas of common space, I love it. I love partnering with people like that”. A potential partnership between Alipay and Apple Pay is exciting news and Cook ended the interview saying it was likely that Jack Ma and himself would have a chat this week. I wonder if Jack’s Ma’s favourite film, Forrest Gump, will pop up in conversation.
Security Fears
Despite these impressive figures, there is still some consumer apprehension over security according to a survey by Thrive Analytics, with 46% expressing concern. 18% don’t see any benefit of mobile payments whilst 32% have simply never given it much thought. It will be interesting to observe if consumer concerns over security lessen as Apple enter the market and possibly partner with Alibaba.
You will find more statistics at Statista
In addition to security, Peter Cohan at Forbes lists three additional stumbling blocks with Apple Pay. Peter states Apple Pay is a “solution in search of a problem”, with many of us happy to use our credit and debit cards, but we have seen experts get Apple’s plans completely wrong in the past, with Cliff Edward of Bloomberg Business Week remarking in 2001 that Apple’s retail store plans wouldn’t work — their stores are now the most profitable per square foot in the world! Retailers may be reluctant to sign up as they are missing out of valuable customer data and it doesn’t save them any money.
Overall, consumers and retailers are yet to fully buy-in to mobile payment systems but we’re acutely aware that tablets didn’t become popular until the iPad arrived, digital music players didn’t become mainstream until the iPod came along and well, we all know how smartphones took off with the arrival of the iPhone. So perhaps the popularity and widespread adoption of mobile payments is soon to change after Tim Cook and Jack Ma put their heads together later this week and agree upon a partnership between Alibaba and Apple. Watch this space!
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