Apple Pay

One Innovator’s View Of Apple Pay

We thought we’d take the conversation about Apple Pay and its impact on mobile payments to Silicon Valley – where it all started and where a lot of payments innovation happens, more generally. But the person we wanted to have this conversation with is someone who’s innovating in payments in a very different way. Plastiq uses the traditional form factor of a credit card to enable what they call “life payments.”Think mortgage payments, tuition, hospital bills, and even car loans – the types of things that people don’t generally put on cards or can’t for a variety of reasons. Plastiq’s business is to enable merchants to accept such payments and let consumers know that they have an alternative method of payment for those purchases.

So, MPD CEO, Karen Webster sat down Eliot Buchanan, CEO and co-founder of Plastiq to find out what a guy who runs a company named after the form factor that Apple Pay and every other mobile player wants to put out to pasture, thinks of Apple Pay.

“Frankly, a lot of CEO’s I’ve talked to out here in the Valley, are sharing the somewhat same perspective with me, which is that, [Apple Pay] is not fundamentally solving a consumer pain point. Using my card to make a payment is not inconvenient.”

Hmm.

To be fair, Buchanan’s perspective is shaped by who his own customers are – who actually do experience inconvenience when wanting to make payments using their plastic cards. Plastiq is focused on larger payments like tuition and taxes on line though while mobile wallets tend to take on smaller payments at the retail point of sale, i.e., a purchase at Walgreens, Buchanan noted. But, he conceded, when it comes to Apple Pay “I’d be remiss to not pay attention.”

Even though it isn’t going to shift how he and Plastiq think about their space or their product, Buchanan noted that “when Apple does something they do it very well. They put a lot of thought into it. For that reason I think they push the needle in terms of the user interface, the consumer experience. And we can all learn something from that.”

Buchanan’s time in payments has schooled him well in terms of what it will take to ignite Apple Pay or any sort of mobile payments scheme. The challenge, Buchanan noted, “is not on the consumer side on getting adoption, it’s the chicken and egg battle, which I think is more prevalent in payments than perhaps any other industry.” Buchanan believes that there will be a very long a very long road to ubiquity “or near ubiquity in terms of a digital wallet on the phone or another medium.” Buchanan goes on to say while the launch of Apple Pay has caused some people to believe that “mobile is here,” Buchanan believes “the data will tell, it’s a long way out,” suggesting that the biggest pain point for digital wallets to solve might be in-app instead of point-of-sale and where some of the early gains and momentum will be seen.

As the discussion evolved, Webster found that Plastiq and Apple Pay do share some common ground. Both have a distinctly different business model.

In a payments about face, Plastiq charges cardholders who want to use their service and provides the service free of charge to merchants. And, both receive incentives from networks and issuers to get consumers to use the product.

Plastiq reports that it doesn’t receive any pushback from businesses because the company is able to offer merchants and brands a new platform and form of payment at no cost – what merchant wouldn’t love that! Buchanan also noted that the company has partnered with the major card brands to go after and target the “non-accepters” and expand the reach for the consumer to places where they could not originally utilize their card of choice.

For additional news on Apple, visit the PYMNTS.com Apple Pay EcoSystem.

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