Two Ways that Apple will Stand Out in Digital Payments


I recently found an old Apple Powerbook from circa 2005 which I re-provisioned for my eleven year old son to use to learn programming. This laptop was like a shiny aluminum time capsule from a time when Apple’s future was still uncertain and other software and hardware providers dominated the scene.

It was interesting to see through my son’s eyes his view of this time period and the experience provided an insightful retrospective to what Apple has achieved in ten years. Back then many key components in Apple’s ecosystem did not exist: iTunes app distribution, a browser on equal footing with the competition, a compatible and generally accepted productivity suite, and a reduced number of ports and devices. Even that this laptop had a CD/DVD drive was a surprise.. I had to explain that there was a time when movies and music couldn’t really be downloaded you had to play them from the Disk.

On seeing 2005 technology first hand, his reaction was priceless as we decided what we would keep and use for his purposes versus discard:

            Internet Explorer: “isn’t that a virus or something?”

My response, “No it was a web browser like Safari or Chrome”

            Virtual PC: “why would I need that?”

My response, “to run Office and other programs”

“No thanks”

iTunes: “Can I download my mac apps here?”

My response, “no, iTunes used to be just for music”

            Connectivity: “why does it have all of these ports?” (Telephone, network, fire wire..)

My response, “we used to need all of these to connect to things..”

What I find amazing looking back through this time capsule is how completely Apple has encapsulated entire value chains around music and applications and how they have pushed their concepts of simplicity forcefully forward.

I expect that in ten years people will be having similar discussions with their kids about payments.

If Apple takes a similar comprehensive approach with payments we can expect nothing short of a full ecosystem approach and some forceful pressure behind their concepts of user experience and simplicity in design. Holistic thinking and simplicity in design are certainly not the current norm in financial services solutions design so this could be quite a profound shift.

All is not lost, however, and nor is the sky falling – as I mentioned in my previous post on the subject my observation is that change in digital payments does not occur in a linear way but rather in a complex network-effect manner.

This means that the introduction of an Apple led payments ecosystem will not replace anything in a one to one manner. This innovation will enhance some existing platforms and systems, it will replace aspects of others, new models will suddenly be possible and new challenges will emerge – the complexity of the change will mask the deep and profound impacts on the industry.

This type of change happens in a both subtle and dramatic way. When television arrived radio didn’t disappear – but it did change. The introduction of digital music did not kill the music industry, but it did change it. That path was not a straight one either; Napster and others tried to revolutionize and capture the digital music space – but Apple got it right. The difference with music as I expect with payments is Apple’s holistic ecosystem approach as well as an almost belligerent insistence on user experience.

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