The buzz surrounding Apple Pay may have initially startled some bitcoin enthusiasts, but industry experts continue to speak out on why the latest mobile payments solution is only passively interesting.
At the Bitcoin Law conference, an event held at New York Law School this Tuesday, American Express VP and senior counsel Emily Goodman Binick called Apple Pay exciting because it will lead more consumers to make purchases with their phones.
A common perspective that emerged is that while Apple Pay is not exactly innovative, it will encourage mainstream consumers to embrace mobile payments – a step that needs to take place if bitcoin will ever be more broadly adopted as a currency.
“I don’t think it’s ultimately going to be that transformative from a fees perspective or that it has the same transformative opportunities as bitcoin,” Binick said. “It’s just another player in the value chain rather than eliminating folks from the value chain.”
The conference assembled a number of legal experts in bitcoin and payments for a morning of discussion on the regulatory outlook for digital currencies.
Organized by New York Law professor Houman Shadab, who has been a leader in the field for the bitcoin community, the event also discussed banking and compliance challenges facing the industry.
Overlapping demographics
CoinComply managing director Brian Stoeckert reiterated the importance of acquainting the general public with mobile payments, as well. In his remarks, he emphasized that younger consumers will be the most likely target for both bitcoin and Apple Pay, as this demographic is general quicker to adopt digital technology.
Stoeckert said that, at some point, bitcoin could even power products like Apple Pay, but that for now, Apple’s product will do a lot to further the adoption of mobile payments.
“It’s accelerating moving your traditional wallet over to your smartphone at the end of the day,” he said. “If it does in fact take off, it’s going to help mass adopt more use of cellular technology and smartphone applications for day-to-day use.”
He went on to note that most young people today are comfortable conducting financial activities online – they use mobile banking apps and websites, for example, to see the status of a paycheck that’s been directly deposited into their bank accounts.
Binick said that from a practical perspective, there hasn’t really been a consumer value proposition for paying with a phone.
She said:
“It doesn’t seem any easier. So, I think that’s exciting, I’m looking forward to seeing how this is tested. […] Ultimately, I don’t see Apple Pay disintermediating … I think it’s a good thing but because there’s just another person taking a piece of the pie, Apple is not going to help us much.”
Marketing and scale
To Binick’s point, Brian Koffler, president of Koffler Legal & Consulting Services, raised the fact that Apple Pay isn’t the first payments solution from a major tech giant, citing others before it like Google Wallet and Visa Checkout – products that never became highly adopted but show that the technology has existed.
It’s a public relations issue more than anything else, according to him, and the same issue affects bitcoin.
Koffler said:
“This point really highlights the impact of marketing and public relations in financial services and bitcoin generally. […] Apple’s an excellent marketing company, they packaged it in a nice package and I think people are going to start using it more.”
Jerry Brito, executive director of nonprofit research and advocacy center Coin Center added that there’s also a case to be made for the scale of Apple’s business. The reason other payments solutions haven’t taken off the way Apple Pay could is that they’re “small and fragmented”, he asserted.
“Everybody’s got their own solution,” he said. “Apple, because it’s such a huge integrated company has the scale to … sign up all the banks, all the credit card networks and turn it on in the same day.”
If anything, Brito concluded, Apple Pay will get people use to paying with their phones – and that’s going to be good for bitcoin.
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