Bitcoin went bonkers again this week with another spectacular dump coinciding with its adoption by El Salvador as an official currency. The crypto price action came hot on the heels of a report from PYMNTS that another method of payment, Apple Pay, is still struggling to gain much headway with iPhone users seven years after its launch. A bit further along the road though, and there’s clearly lots of optimism for in-car payments, as J.P. Morgan’s acquisition of Volkswagen Payments indicates.
Joining PYMNTS to discuss The Week in Payments was Finicity President and Chief Product Officer Nick Thomas, whose own personal experiences help to shape his thoughts on the problems with Apple Pay and the prospects of in-car payments.
The report from PYMNTS on Apple Pay this Monday (Sept. 6) made for sober reading for the fruity handset company, as it revealed just 6% of iPhone users actually use the service to make in-store payments on a regular basis.
What’s worse is Apple Pay struggled to improve its market share even during the pandemic. At a time when alternative payment methods were soaring, Apple Pay practically stood still.
Related: Seven Years Later, Only 6% of People with iPhones in the US Use Apple Pay In-Store When They Can
“What I found is that the user experience, or the payment loop, it fails,” Thomas said in a chat with PYMNTS. “It fails because I don’t pull my mask down in 0.3 seconds.”
The issue is Apple Pay’s reliance on FaceID as an enabler, he explained. Being forced to mask up before you enter a store, and then having to quickly pull that mask down just before scanning to make a payment, it just doesn’t work as fluidly as it should.
“I used to use Apple Pay all the time because it was faster and easier,” he said. “But I’ve gone back to cards because of the mask.”
Thomas didn’t offer an explanation for why Apple Pay adoption was so low even before the pandemic but said mask mandates certainly haven’t helped anything. But surprisingly, as a former user, he said he’s optimistic it will eventually grow so long as Apple keeps persisting. He said a more recent innovation, the launch of Apple Wallet, makes Apple Pay a much more interesting proposition in situations where users need to make a payment and show their identity at the same time.
“So let’s say you’re buying medication and you need to make the payment and show your driving license,” he explained. “I believe that if it’s designed correctly it should be a lot less friction than pulling out a card, signing, then pulling out a driver’s license. Apple and other wallet providers are in a great position to be able to make that process seamless.”
Another company that Thomas believes is in a good position, after acquiring Volkswagen Payments, is J.P. Morgan. In-car payments are still an emerging concept, but there is definitely a lot of friction that such a capability would be able to resolve.
Further reading: J.P. Morgan’s Deal for Volkswagen’s Payments Unit Reflects Acceleration of Connected Cars
Thomas explained if you think about the whole gas station experience, it could really be made a lot smoother than it is now.
“Every time I go there and I go through this flow of insert your card, do you want a carwash? No. Do your loyalty, do your scan etc.,” he said. “All of that friction of the flow to actually get to the place where I’m pumping gas, it needs to be fixed and that the technology’s here to do it.”
As cars move toward becoming more autonomous, Thomas thinks this concept of embedded finance in cars will emerge, so that as you drive into the gas station the pump can send a text that verifies who you are at the point of sale, to eliminate some of the present friction. It’s an experience that can be extended to other areas, like paying for toll roads or driving to pick up some food, he said.
“Sometimes I just think, why isn’t the car a card already?” he opined.
In-car payments are sorely needed then, but many have wondered if the same can really be said for bitcoin. El Salvador this week went ahead and made the cryptocurrency legal tender anyway. The move apparently sparked a massive sell-off though, as the price of BTC fell by 16 percent just hours after it became officially usable anywhere in the Central American nation. Other cryptos took a hit too, with Ethereum falling 12 percent.
Read more: El Salvador’s Adoption Triggers Bitcoin Price Slide
For Thomas, the most important thing is to look beyond the pumps and dumps and consider the massive amount of innovation and collaboration taking place in the space. He said in his view the world has never seen anything quite like it, with so many developers and financiers from different nations all working together on various crypto technologies and projects.
He drew an interesting analogy with Ethereum today and the Bluetooth wireless standard that he helped to develop way back in the 1990s. Bluetooth, he explained, is an interoperability brand and its fundamentals have changed no less than five times over the last 20 years.
“The only way that was able to happen is because of the structure of the organization and the way people are working together around Bluetooth globally to keep an interoperable and move it forward,” he said. “So if I look at the moves being made by the Ethereum community, it’s doing some amazing things to bring the community into this cadence of change and improvement and innovation, to maintain that interoperability. So it smells a lot like Bluetooth to me.”
“I believe that Ethereum and it’s migration to Ethereum 2.o, will be considered one of the seven wonders of the world,” he stated.
It was a bold statement, but Thomas clearly holds very bold opinions on crypto in general. To those who try to discredit it simply because of all the pumps and dumps that happen, and to those who say it has no value, he retorts that they’re not looking deeper into it from an industry and a collaboration perspective.
You might like: El Salvador’s Risky Legal Tender Leap Into Bitcoin
“What we see with cryptocurrency today is not the future,” he said. “But there’s real value there and there’s an opportunity for the globe to innovate in a way that will be unlike anything we’ve seen.”
Thomas said he sees crypto as one of four emerging “galaxies of coolness” in the world of tech that are going to cause untold disruption in unimaginable ways.
“You think about open banking, digital identity, data privacy, and you think about crypto. What we’re seeing is this massive collision of these four different galaxies coming together at an extremely rapid pace,” he said. “It’s going to create chaos, planetary collisions, and we’re going to see companies come into a market and be winners, and nobody will see it coming because of the really interesting convergence that’s happening in all in all four of these things.”
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