Is Apple Pay the Bridge to a Mobile Payments Standard?

It’s clear that Apple has a tremendous amount of influence when it comes to consumers and their technology, a path SecureNet’s CEO Brent Warrington, says consumers are quite comfortable traveling. But Warrington tells MPD CEO Karen Webster that getting into payments is a much bigger play for Apple; making the point that payments isn’t just about shopping at a large retailer in a big city, it must be just as relevant on Main Street USA. That prompted a free-wheeling discussion between the two on all things Apple Pay, its impact on the ecosystem and whether it is the “bridge” to a mobile payments standard.

KW: So, Brent, what are your thoughts on Apple Pay?

BW: It’s very exciting. We were hoping to have something with the iPhone 4 or 5, but now that we have it, I think it’s great for both SecureNet and the industry, yet another great advancement of technology in payments. The size of stage that Apple commands will help continue to drive technology in payments, and drive payments to the multichannel marketplace where the industry is headed anyway.

For us, we’re completely focused on creating an “un-channeled” consumer experience – a seamless movement of the consumer throughout online and offline merchants. This is another way by which we can leverage the SecureNet technology, as we’re also very focused on the consumer.

KW: When it comes to accepting Apple Pay, what are you hearing from customers and prospects wanting to know what to do, when to do it, how to do it, and if they should do it?

BW: There are series of waves that have led merchants to think about their POS strategy. We saw EMV, mPOS, tablet-driven POS, and security concerns around recent breaches – we now need to sit down and think about the strategy.

SecureNet continues to preach this. It’s in our DNA, staying focused on the consumer. But with Apple Pay, people will continue to take NFC and mobile payments more seriously, and focus more on how the consumer wants to pay versus what they choose to deliver to the consumer to let them pay.

KW: What will it do from the consumer perspective that businesses will now have to be prepared to support?

BW: It brings the life back to NFC, without a doubt. But more than that, we’re looking at hardware in relation to mPOS that has integrated NFC into it, along with EMV. We can still solve for this via SAS. This is not going to be a lockdown hardware play on NFC, which was part of the pushback before. People didn’t want to replace a past-generation philosophy of hardware.

Now, we’re much more ready through this wave of EMV, as merchants are thinking about how they’re going to accept NFC at the risk of losing business or missed opportunities because of their lack of an ability to accept it. They’re teeing themselves up, and what Apple does is bring more legitimacy, and hopefully a standard, to payments.

But we’re all just curious to understand what this all means. But from our side of the industry, I do think it’s another way to help advance payments.

KW: What I think is so interesting about Apple Pay is that so many of the things that people resisted from other players that situated themselves as an intermediary between the consumer seem to be “OK” now. Apple really has created that role for itself. Apple Pay is between the issuer and the consumer, the merchant and the consumer. It’s an interesting dynamic that they’ve established as they’ve entered the ecosystem. People haven’t really focused on the fact that Apple has put itself in a position of being very powerful.

BW: That’s a great analogy and observation. The focus has been siloed, and to your point, Apple Pay serves as a standard to bridge the gap to start to create this holistic view of what the consumer experience is and needs. And it brings the merchant along as well. I see it the same way you do – as a bridge, and as a way for people to focus on the holistic experience instead of just the consumer experience.

NFC will continue to take off, along with everything that comes with that including BLE. We have the ability to capture the entire experience within a merchant of a consumer with these technologies. From our viewpoint, a consumer can walk into a shoe department and we can almost instantaneously prepopulate that entire consumer’s history across all channels via an mPOS device. It creates a secure protocol for us to close the loop between consumer data and what we have to bring to the table on the processor/acquirer side.

KW: Do you worry about what would happen if Apple Pay becomes the standard, using its control of the consumers that they have access to, and giving other players in the ecosystem a bit less power over choosing their own destiny?

BW: I don’t have any concerns. Apple has a unique ability to drive and influence consumer behavior, and from our perspective, that’s not a concern at this point. But there’s a lot to be learned. And payments is a complex, huge ecosystem. It will take multiple end points, multiple points of technology and providers to completely solve for the ultimate consumer experience is. We’re certainly comfortable with what our role will be in all of that.

Once again, we think this is just another great advancement in technology in payments. If it leads to a standard, it’s a standard, and I think that will help the industry as well. But that being said, it’s much more than just solving for just NFC. They aren’t solving just for what truly is a consumer-driven multichannel purchasing experience. There still continues to be sources of data that will help businesses become smarter, and derived from multiple sources.

KW: How will this change how you do business with your clients? It sounds like you’re well positioned already to take advantage of a lot of the things that Apple Pay brings to the ecosystem. Are there things that you’re tweaking to enable you to take advantage even more of what they’ve created?

BW: I don’t think it changes anything for us, but I think it will make more merchants aware of what the ecosystem needs to be versus what it already is. We already getting calls from merchants and clients about what this means, but for us it could just potentially accelerate the “m-game.” We think that this is what truly is a consumer-centric payment strategy that has all of the elements of providing data and help businesses become smarter.

KW: It wouldn’t surprise me to see Apple get more aggressive in packaging up its iPads with beacons, and really making it an obvious retail POS package now that it has the ability for consumers to initiate payment via Apple Pay. It seems like that would be an opportunity for you, too, right?

BW: Absolutely. We’re already running beacon transactions in our lab using our platform, and more importantly, we’ve also created a non-Apple BLE beacon technology that we’re testing. For us, this all accelerates our technology roadmap, which we think is very exciting.

KW: Let’s talk about Android. How do you see that ecosystem evolving based on the news of Apple Pay, and how do you play in that environment? 

BW: I think the news of Apple Pay will cause an Android standard of payment, as at this point it’s very fragmented. But, that being said, there are a lot of Android users. To truly take advantage of this from the merchant perspective, we see our role as creating an acceptance for all devices, not just Apple. That’s why we are testing an NFC and BLE version of Android – we want to promote universal acceptance. It would be hard to convince a merchant today to go all in on a specific standard, especially when there’s still such a split between Apple and Android users. And then when you look at SMBs in middle America, this becomes much more complicated. This isn’t always about shopping at a large retailer in a large city. These problems have to be solved everywhere.

KW: That’s where this gets interesting. For anyone who enters payments, no matter who they are, the process takes a long time and is difficult. I’ve talked players who have been in the business for a long time, and trying to get something new into the market even if you’re already in it is a challenge.

I think a question that these merchants will have to sort out is, what should they do? It will take years for this to work its way through the system, don’t you think?

BW: Absolutely, and I think it could change 5-6 times between now and when it’s universally accepted. There are many examples of well-funded, high profile companies that have made a push into payments – it’s complex because there are multiple sides, and on each of those sides, it’s heavily fragmented. It’s more than just a gleaming piece of new technology.

I think what Apple will do is create more of a focus for other players to study that standard and find out what role they need to play. It will be multiple companies hopefully operating off of the same standard, which at the end of the day will ignite success in the ecosystem.

KW: Yes, and Apple ignited beacon last year. Now they’re igniting the payments system this year. The two together are just amazingly powerful.

BW: Right. But solving for consumer behavior is much more than just NFC and acceptance –there is heavy lifting involved. But we’ll see what happens. I think there is an argument that will be had for a long time in payments over what the standard is and what is the true multichannel strategy. We embrace it all now, and SecureNet is lucky enough to have a platform that’s very flexible.

More importantly, we’ll help merchants navigate their way through this and continue to give them tools to push the consumer experience as it should be defined: unchanneled, completely frictionless, and data-driven.

Brent Warrington
CEO, SecureNet

Brent Warrington, CEO of SecureNet, has two decades of experience in the commerce and payments industries. As the head of SecureNet’s leadership team, Brent develops and executes the company’s growth initiatives and market expansion strategy.

Prior to joining SecureNet, Brent served on several successful executive management teams in the payments industry. Brent spent seven years as CEO of online banking startup FundsXpress Inc., which was acquired by First Data Corporation, where Brent served as Senior Vice President and General Manager of ePayments. Brent was also Vice President of Marketing for Great American Insurance Company, where he developed industry-leading comprehensive online and offline marketing strategies.

Brent’s prior speaking engagements include the Electronic Transaction Association’s Strategic Leadership Forum 2013, Money 2020 2013, William Blair 2013, Goldman Sachs 2012 and several eCommerce, online banking and financial services conferences.

When Brent finds a rare moment away from the office he can be found at his Texas ranch, likely planning his next hunting or fishing expedition.