Is Apple Pay Really a Major Fintech Player?

Two recent moves with Apple Pay are casting serious doubt on the contention that Apple (NASDAQ: AAPL) is a “major player in financial technology.

First Apple is offering some very deep discounts to people who use Apple Pay at retailers with its clever “Lose your Wallet” campaign. For example a person can get up to 50% off a purchase from something called Asian Box and a free gift with purchases from Deluse Jewelers.

Lose Your Wallet will be held at select retailers in certain areas. The promotion will be held in specific communities on specific weekends.

Big Retail is still Saying No to Apple Pay

The Apple Zombie press is heralding the promotion as proof of Apple Pay’s success. To me it looks suspiciously like a desperate effort to bribe the public into using a product.

The hope is that promoting Apple Pay at Main Street Merchants will convince big retailers like Walmart (NYSE: WMT) and Kroger (NYSE: KR) to accept the wallet. Most large American retailers are still saying “no” to Apple Pay despite the all the hype.

The list of retailers that accept Apple Pay posted at Apple’s official website on August 3, 2018, was almost identical to the one there a year before. Most big name retailers were still conspicuous with their absence from the Use Apple Pay list.

PALO ALTO, CA – SEPTEMBER 19: Customers look at the new iPhone 6 at an Apple Store on September 19, 2014 in Palo Alto, California. Hundreds of people lined up to purchase the new iPhone 6 and iPhone 6 Plus that went on sale today. (Photo by Justin Sullivan/Getty Images)

A huge problem I see with Lose Your Wallet is that no major national retailers are participating in it. Instead, only local merchants are offering discounts, which is commendable but not indicative of a mass market product.

Chase ATMS now work with Apple Pay

A far more important story was JPMorgan Chase’s (NYSE: JPM) announcement that it will start accepting Apple Pay and Google Pay at its ATMs.

All Chase debit card holders will be able to use Apple Pay to get cash through the Chase Mobile app, a press release indicates. The App will apparently work at most of Chase’s ATMs nationwide.

This is big news because Chase is America’s largest bank and it operates 16,000 ATMs nationwide. Tellingly, Chase’s press release does not mention Apple Pay or Google Pay specifically it simply states “you can you use your phone’s mobile wallet.”

The Chase announcement is big because it would enable customers to get cash without a wallet. That might get more people, particularly older folks who are afraid of being without cash to use mobile wallets.

What Mobile Wallets does Chase Accept

Not all mobile wallets will work at Chase ATMs, the monster bank admitted. Chase’s website states that only near field communications (NFC) based tools like Google Pay and Apple Pay will be accepted.

NFC solutions use a wireless signal to connect the wallet to ATMs. Therefore, Chase’s ATMs may not accept quick-read (QR) code based solutions like Alipay and WeChat Pay.

A QR code solution uses a phone’s camera to read a code on a screen. The code tells the phone how to establish a connection with a financial institution’s payment system.

Interestingly, Chase has been promoting its own QR code based product called Chase Pay for some time. QR code is the standard method of connectivity for mobile wallets in China and India, but not the United States.

A likely scenario is that the ATM of the future will accept both QR code and NFC wallets. An obvious reason for that will be to allow Chinese and Indian tourists to use the ATM.

Only time will tell if Chase can help reach mobile wallets like Apple Pay finally reach a mass market. Public acceptance of mobile wallets is providing far more difficult than Tim Cook’s publicity department would have us think.