Bill Gates thinks Apple Pay is a powerful move forward for the payments space and anticipates it will set in motion a wide range of positive developments.
In a Bloomberg TV interview, Gates said Apple Pay shows what is possible. “Apple Pay is a great example of how a cellphone that identifies its user in a pretty strong way lets you make a transaction that should be very very inexpensive. So the fact that in any application, I can buy something, that’s fantastic,” Gates said. “The fact that I don’t need a physical card anymore, I just do that transaction, and you’re going to be quite sure about who it is on the other end, that is a real contribution. All the platforms, whether it’s Apple’s or Google’s or Microsoft’s, you’ll see this payment capability built in. That’s built on industry standard protocols. Apple will make sure it gets to critical mass for all of the devices.”
He also applauded Bitcoin for similar reasons. Bitcoin “is exciting because it shows how cheap it can be. Bitcoin is better than currency in that you don’t have to be physically in the same place and, of course, for large transactions, currency can get pretty inconvenient. The customers we’re talking about aren’t trying to be anonymous. They’re trying to be known. So the Bitcoin technology is key and you could add to it or could build a similar technology where there’s enough attribution where people feel comfortable that this has nothing to do with terrorism or any kind of money laundering.”
Gates chided the payments industry that these conveniences have to be matched by lower fees. Many banks “want to have these additional (mobile) customers, but they have to embrace the idea that the fees are going to be a lot lower. So they have to find a way to service these new customers. Now that means these customers aren’t going to be coming into their branches and they can charge a higher fee when you want to actually cash out. But if it’s a pure digital to digital transaction, then you should be paying less than a percent to move that money from you to a merchant or you to a friend, even with meeting all of the regulatory requirements.”