Why Apple Pay Could Be An Advertiser’s BFF

ApplePayApple’s first contribution to the wearables market may not be about advertising today or ever – but it could be a step on the way to closing the online/offline gap.

The Apple Watch, which fans had previously been referring to as the iWatch, was unveiled to the world Tuesday at Apple’s product launch in Cupertino, along with the iPhone 6, iPhone 6 Plus and iOS 8, its first operating system update in a year.

But one of the most highly anticipated announcements came in the form of Apple Pay. After years on the fence, Apple’s new devices, including its watch, include NFC technology to enable secure one-touch payments.

“Our vision is to replace [the wallet] and we’re going to start by focusing on mobile payments,” Apple CEO Tim Cook told the crowd. “Payments is a huge business.”

In the US alone, consumers spend about $12 billion a day using credit and debit – which translates into more than $4 trillion a year. In other words, we’re talking about 200 million transactions a day, or, as Cook put it, “200 million times we scramble for our credit cards and go through what is a fairly antiquated process.”

Apple Pay will work together with Passbook, where users can store and view their credit cards after they’ve been verified by Apple, which has already partnered with American Express, MasterCard and Visa. From there, it’s just a matter of tapping your phone at an NFC-enabled point of sale. Disney, Macy’s, Whole Foods, Sephora, Panera, Walgreens and, of course, Apple stores are all on board to accept Apple Pay. Other brands, like Groupon, Target and Uber, will be integrating Apple Pay directly into their iOS apps.

With Apple Pay, Apple enters the mobile payments space in a big way, interesting because of the company’s previous reticence to get involved with NFC. But also noteworthy is Apple’s complete disavowal of data collection, despite the mass amounts of shopper data soon to be at its fingertips. While players like MasterCard and Amazon are starting to monetize their data – granted with a laser focus on privacy – Apple wants nothing to do with it.

Eddy Cue, Apple’s SVP of Internet software and services, was emphatic on that point during the presentation.

“We’re not in the business of collecting your data,” Cue said. “If you go to a physical location and use Apple Pay, Apple doesn’t know how much you bought, what you bought or how much you paid for it. That’s a relationship between you, your merchant and your bank.”

Apple’s attitude isn’t much of a shock, since advertising in general doesn’t seem to be a high priority for Apple. The company didn’t even mention iAd – or the word “advertising” – in its Q3 2014 earnings call in July.

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