Apple and Mobile Payments: Why India is Different

Upcoming mobile wallet startups in India have much to thank the fragmented Android market in India for. Imagine if we were a market like the US, here Apple has over 40% market share?

If you are wondering why that is a problem, you need to read it with the fact that Apple has the credit card numbers of nearly 800 mn iTunes users. Analysts in the US are already talking about how mobile payments could be the next gold mine for Apple.

Essentially, Apple has all the elements for a great payment infrastructure in place. With touch ID and iBeacon, like I’d written last year, Apple could easily become the mobile wallet of the future.iphone fingerprint

Mobile wallets are essentially competing with cash. The battle is already steep. Cash is fast and convenient. It is traditional and already has the ‘network effect’ going for it. Cash is also considered safer, at least if you can physically guard it.

App based solutions don’t give users the sense of complete security, unless it comes with some sort of a physical authentication. This is where Apple is ahead of everyone else with its biometric fingerprint scanner and when it comes to payments, security makes all the difference.

Apple’s Probably At It Already

If the company decides to launch its own mobile wallet, all the high end users will go to Apple. In fact, at the recent quarterly earnings, Apple CEO Tim Cook has already indicated that mobile payments is an area that interests Apple. Here’s what he had to say about it in a recent interview

I think it’s a really interesting area. We have almost 800 million iTunes accounts and the majority of those have credit cards behind them. We already have people using Touch ID to buy things across our store, so it’s an area of interest to us. And it’s an area where nobody has figured it out yet. I realize that there are some companies playing in it, but you still have a wallet in your back pocket and I do too which probably means it hasn’t been figured out just yet.

They already have your credit card details on file and have solved micropayments to a great extent with iTunes. It is also likely that Apple won’t open up Touch ID for third party wallets to use.

Thankfully for mobile wallet startups that are making a comeback in India, Apple isn’t very big in the country yet. Credit cards aren’t big in India either. Device fragmentation among Android users also gives companies an opportunity to deliver a consistent wallet experience.

All the macro trends are in favor of mobile payments– there is a growing smartphone market, mobile internet is improving, and consumer behaviour is slowly changing. Will India skip credit cards and move to mobile wallets? It’s probably just a matter of time. What do you think?

What do you think?

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