Apple Inc. (AAPL), Alipay and Tenpay: What is the Difference?

Is Apple Inc. (NASDAQ:AAPL)‘s new mobile payment method really the breakthrough that is characteristic of the tech giant and what many believed would put Apple at the front of payments industry? On Bloomberg, Rich Barton, who is the Chairman and Co-founder of Zillow, discussed the future outlook for this new product with Stephanie Ruhle.

“[…] One of my issues with Apple Pay though is that I don’t think that they are really disrupting or they are not evolving the way that credit card payments actually work, and the way banks get their fees. They are actually riding along this very profitable layer of 3% of all our transactions and taking money from that. I would rather see a payment vehicle that is more like Alipay or Tenpay in China, where it is near friction-less and nearly instant. That is what we should be evolving to,” said Barton.

Even though Barton highlighted the weakness of Apple Inc. (NASDAQ:AAPL)’s payment method, he still did not bet against it. After all, the tech giant is known for making technology an integral part of our lives, as history can tell.

There are quite a few hindrances that Apple Pay has to face before it can really receive the crown for being the leader in the mobile payments arena. Since this market is still young and fresh, there are quite a few competitors who are fighting tooth and nail to get the lead on each other. One such rival is CurrentC which is an alliance of a couple of merchants, who do not want Apple Inc. (NASDAQ:AAPL) to run away with these 3% margins, but are instead willing to cut the margin and offer their customers incentives, which Apple Pay is not in a position to offer.

Hence, reiterating what Barton said, Apple Inc. (NASDAQ:AAPL) will have to do better and either follow the footsteps of its Chinese counterparts, or put a foot on that innovation gas pedal that it is renowned for.

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