2019

Richfield Graduate
Institute Of Technology

Angel

[M-COMMERCE ASSIGNMENT]
Table of Contents
Question 1.1 .................................................................................................................................... 2
Question 1.2 .................................................................................................................................... 4
Question 1.3 .................................................................................................................................... 5
Question 1.4 .................................................................................................................................... 7
References ...................................................................................................................................... 8

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Question 1.1
What is the value proposition that Apple Pay offers consumers? How about merchants?

Apple Pay offers the following to the consumers

Simpler payments:

 Once shoppers have their credit card stored in the iPhone, they need only hold the
phone near an NFC reader, approve the transaction with their fingerprint using iPhone’s
Touch ID, and the payment is processed within a couple of seconds.
 The process is simpler than the traditional credit card swiping process, which typically
includes: swiping a card and then selecting debit or credit, providing a separate
identification, and affixing a signature.

Security:

 Since a credit card does not need to be present, there’s less likelihood of a stolen
number. Moreover, Apple does not use the credit card number for processing the
payment but uses a token called the “device account number” to process the
transaction, which further reduces the chances of the credit card details getting stolen.
 Apple Pay is an implementation of the EMVCo specification that is considered by many
industry experts as the most secure payment mechanism.
 If your phone is ever lost or stolen, you can lock down Apple Pay remotely. Just visit Find
My iPhone on another Apple device or from your browser, and put your Device into
"Lost Mode." Apple Pay will be suspended, and your phone will be locked to keep
would-be thieves away from your data.

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Greater privacy:

 Apple will not track shopper transactions and store the data.
 The use of device account numbers versus the credit card makes the transaction even
more private with the retailers as they do not see the shopper’s name and other details,
such as the billing address.

Lower risk:

 Large retailers like Target and Home Depot have recently experienced credit card
breaches.
 Apple Pay eliminates that by avoiding the use of the card details as part of the
transaction.
 With Apple Pay, the device account number, along with a transaction-specific dynamic
security code, is used to process the payment.
 So the actual credit or debit card numbers are never shared by Apple with retailers or
transmitted with the payment.

Better experience:

 Based on published reports and available videos, the service seems to be easy to use.
 The service automatically selects the default card from Passbook for payments, which
can easily be overridden with a swipe.

No extra fees for retailers:

Apple does not charge retailers or shoppers fees for this new service. But it does take a portion
of existing credit card transaction fees.

Apple Pay offers merchants the following:

 Cashless option to increase the safety of shoppers. When there is not contact cash in
stores then they cannot be targeted for robberies.
 Credit-card networks are incenting retailers to install payment terminals that accept
cards embedded with a chip. If they fail to do so, the merchants, instead of the banks,
will liable for fraud that originates from cards that have chip technology.
 The tap and go is also faster which ensures that customers can buy and will not change
their minds due to slow service.

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Question 1.2
What are some of the limitations of Apple Pay that might prevent its widespread adoption?

Adoption:

 Getting shoppers and retailers to use the service could be difficult, since it requires
shoppers to have an iPhone 6 and retailers to support NFC terminals.

No online shopping support:

 You can use Apple Pay to buy apps and buy other items within apps but the service does
not support online shopping.
 Since a large percentage of iPhone 6 users would also likely shop online, the service has
a huge limitation, unless Apple is trying to emphasize mobile shopping — or unless it
adds online shopping in the near future.

Stability:

 Apple Pay looks good now; but can it scale when millions of shoppers start using it?
 Can an Apply Pay transaction process as quickly in practice as it has in the demos? If not,
it will impact adoption.
 Shoppers would not likely wait while the iPhone is attempting to confirm the
transaction.

Higher fees:

 Currently the service is being launched with no extra fees. But will this continue?
 Some observers wonder if credit card companies will stop sharing the fees with Apple,
which could result in higher fees for retailers, which could hurt adoption.

Compatibility:

 The fact that Apple Pay is only available to Apple users makes people skeptical because
they cannot use it with android.

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Question 1.3

What advantages do the Square and PayPal mobile card-swiping solutions have in the mobile
payment market? What are their weaknesses?

Advantages of PayPal and Square:

 Free for buyers, and can be used in almost everywhere including online and as mobile
payment.
 Most buyers online usually use PayPal for most of their transactions, because it safe,
and It is very easy to sign up to get started.
 PayPal has good interest rates based on credit, and it is one of the easiest forms of
payment and immediate payment right from your bank account.
 Money can be transferred to anyone with an email address or phone number in a short
time, even if the person is not related to you in most cases.
 Square and PayPal mobile card-swiping solutions have changed the way business
receive payments.
 No matter the size of the business, they are no longer confined to a set location to
receive payments. With this Technology businesses are now able to roam freely and
even expand their region in which their business operates.
 The main advantage of these two product is clearly accessibly and mobility. The pros of
both these products include the wide range of payments these devices both accept.
 Both the square and PayPal have the feature that allows track every transaction
including invoices.
 The products allow for both to enter manually the card number of any card if there
were any damage to the consumer's card.

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Weaknesses of Square and PayPal

 Both devices have a few but similar cons that include a percentage for every swipe
transaction that is made.
 The PayPal device doesn't have a dedicated app for Ipad or for other tablets, which in
essence makes it not future proof and mobile e-commerce incompatible

Their combined advantages and disadvantages may make it seem like they are quite similar but
they do have a more competitive comparison.

Pros of PayPal Pros of square.

 Facilitates its account holders to send  Provides free online store for the
and receive money. users.
 Customers don’t have to reveal their  Lower rates on Pay-as-you-go-
credit card processing account. model.
 There are flexible payment methods,  Post payment-printing facility
optional credit cards and online PayPal available for invoice printouts.
to PayPal transaction.
 Funds are accessible via PayPal  Square wallet can be integrated
worldwide with one’s electronic wallet.
 Merchants can avoid buying credit card
swiping devices.
 Payment of monthly fees can be
avoided.
 Security and convenience is the major
advantage of PayPal payment system.
 Allows peer-to-peer payment system
through which authorized users can be
sent payment through email.

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Question 1.4
What strategies would you recommend that Apple pursue to assure widespread consumer
adoption of Apple Pay?

 Apple Pay like many other mobile payment solutions has its roots embedded in the
existing debit/credit card payment systems.
 This may have been necessary in order to move (relatively) quickly and to ensure
widespread adoption, but it promotes systems that have inherent data security issues
and does nothing (yet) to address payments to online (web-based) merchants, where
fraud is becoming the biggest issues for merchants and issuers alike.
 Apple Pay's reliance on legacy debit/credit card systems also promotes the existing
interchange fee system which is the biggest pain point for merchant payment systems in
general.
 Although it would have been nothing short of miraculous for Apple to introduce a new,
reduced fee scheme for merchants with Apple Pay, doing so would have better assured
widespread merchant adoption.
 While a brilliant solution for the debit/credit cardholders of the US (and perhaps soon
elsewhere), Apple Pay offers nothing (yet) for the unbanked that lack access to those
forms of payment.
 Without question, solving for that group is a difficult challenge and it’s no surprise that
Apple Pay 1.0 did not address that challenge
 A service for handling cash deposits into some form of prepaid account (or something
better) would also encourage people to adopt Apple Pay
 The lack of an automated link to one or more loyalty programs has already been pointed
out by others but I believe its well worth another mention here.
 Since Apple can't offer any financial incentive to merchants (other than the prospect of
reduced risk of data theft), why not provide clear incentives to cardholders to use and to
demand the use of Apple Pay?
 Apple needs to get more merchants on board, and should consider modifying its Apple
Pay so that merchants could market during the payment process. Without merchant
participation, Apple Pay will take many more years to achieve acceptance.
 Apple should increase its presence in e-commerce websites and applications. Apple
should grow together with merchant services; help the merchants to sell their stuff
online via apple.
 Apple Pay should be made available to all the iPhones such that people who do not have
the latest iPhone can still use Apple Pay.
 Apple should also think of cross platform support in future because not everybody has
an iPhone.

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References
Bertke, R. (2014, September 23). 4 Ways Adopting Apple Pay Can Benefit Small Business.
Retrieved from Entrepreneur: https://www.entrepreneur.com/article/237719

Boyce, M. (2019, March 02). Apple Pay advantages and disadvantages you must know.
Retrieved from PayPax: https://paypax.net/blog/apple-pay-advantages-disadvantages/

Case study. (n.d.). Retrieved from http://cs3.uwsuper.edu/xzhai/380%20chapter%205.htm

Community. (2019). Square Point of Sale Reviews. Retrieved from getapp:

https://www.getapp.com/finance-accounting-software/a/square-point-of-sale/reviews/

JASON PARKER, N. R. (2015, July 14). Everything you want to know about Apple Pay. Retrieved
from c|net: https://www.cnet.com/news/everything-you-want-to-know-about-apple-
pay/

MEHRA, G. (2014 , OCTOBER 5). Explaining Apple Pay: Pros, Cons. Retrieved from Practical
Ecommerce: https://www.practicalecommerce.com/Explaining-Apple-Pay-Pros-Cons

Staff, C. H. (2019). What advantages do the square and paypal mobile card. Retrieved from
Course Hero: https://www.coursehero.com/file/p158pac/What-advantages-do-the-
Square-and-PayPal-mobile-card-swiping-solutions-have-in/

Staff, M. (2019, September 5). Apple Pay. Retrieved from MacRumors:

https://www.macrumors.com/roundup/apple-pay/

SWEET, K. (2018). Advantages & Disadvantages of Using PayPal. Retrieved from itstillworks:
https://itstillworks.com/advantages-disadvantages-using-paypal-1254.html

Yamamura, G. (2014, December 23). What are the main weaknesses of Apple Pay, after a few
months of operation? Retrieved from Quora: https://www.quora.com/What-are-the-
main-weaknesses-of-Apple-Pay-after-a-few-months-of-operation/answer/Gary-
Yamamura