Why Apple Pay may help rebuild trust in US finance
Apple's launch of its mobile payment system for stores could crack open a new market, but also show how to retain and expand customer respect for the finance industry.
Restoring trust in the American financial system since its 2008-09 crisis has taken quite a while. The effort involves more than reform of banks and Wall Street. Trust in commercial institutions remains low. Almost every month, another major retailer is hit by a breach of credit- and debit-card data. Even President Obama, after dining at a New York restaurant last month, had his credit card rejected for a mysterious reason.
Trust is not a physical commodity that, once spent, is gone. It can be rebuilt, even expanded. In finance, it requires innovation in offering better proof of transparency, protection, and usefulness. One example may be Monday’s launch of Apple’s new method for making payments simply by waving an iPhone at a check-out counter. It promises a new type of security, convenience, and reliability.
Known as Apple Pay, the system is up against a high level of consumer distrust in this new kind of cashless and cardless “mobile wallet.” The plastic credit card has been around for more than half a century. And while online banking and Internet shopping are now widespread, even major companies such as Google and PayPal have yet to win over many customers to their own version of digital payments in stores with smart phones.
Apple, however, brings a hefty customer base. It has enlisted major retailers and most major credit-cards companies. The new system offers several layers of security, including finger-print identification. A thief would find it difficult to steal a credit-card number with Apple Pay.
One retailer, Starbucks, has already shown success with its contactless payment scanner. It has created a community of trust, not just an innovative technology. Just as money itself has become more abstract – from coins and paper currency to checks and credit cards – so must commercial institutions ensure higher qualities of thinking in their staff and services. The “Internet of things,” such as Uber car service, is really the Internet of better sensitivity to the needs of customers.
Each new advance in technology has its early adopters, or those willing to put convenience before potential problems, such as loss of privacy or identity theft. Now in tapping its many advantages, Apple could be the company that finally opens the “mobile wallet” market to the masses, as it did with the tablet and the mobile music player. But it can also show how trust in the world of business, especially finance, can be built up anew, and not only rebuilt.