Lofty promises of a mobile electronic wallet have been around for a decade, only to crash down to earth as consumers continue to stick with the venerable plastic credit-card swipe. Will the newly unveiled Apple Pay be any different? There are signs Apple might be able to pull it off.
If this happens, however, not everyone will be happy, particularly those in the enterprise world.
"BYOD is dead as soon as Apple Pay takes off," says Yaacov Cohen, co-founder and CEO at Harmon.ie, a developer of enterprise mobile collaboration software. It's bad enough handing over your personal apps and data to your employer under a Bring Your Own Device policy, he says, but having to add personal purchasing history is a deal killer.
Nevertheless, Apple Pay stands a good chance of making the mobile electronic wallet a reality. The new iPhones supporting Apple Pay are selling like gangbusters: a record 4 million orders on the first day. In an SFGate story, Citi Investment Research analyst Mark May says mobile payments could grow from $1 billion in 2013 to $58.4 billion by 2017.
There's still a long way to go. Only 5.5 percent of U.S. retailers, or 220,000 stores, will accept Apple Pay right now, according to the National Retail Federation. This doesn't include retail giant Wal-Mart.
But Apple Pay can start to stymie BYOD incrementally a lot sooner, Cohen says. If an employee -- probably a coveted millennial worker -- begins using Apple Pay, this person will probably opt out of BYOD. CIO.com sat down with Cohen to get his insights on Apple Pay and how it will impact the enterprise.
CIO.com: From an enterprise perspective, what was the most significant Apple announcement?
Cohen: I was really impressed with Apple Pay and the agreements with Skype, banks and credit card companies. It was a bold move from Apple. This has the potential to really change the way people buy stuff. Your phone becomes so personal, not just having your photos but your purchasing history. It'll have a pretty substantive impact on the enterprise.
CIO.com: How so?
Cohen: Let me ask you this question: If Apple Pay works well tomorrow and your phone becomes your wallet, are you ready to give your wallet to your employer? BYOD now means BYOW, as in Bring Your Own Wallet. But you don't want your employer to manage your wallet, put software on your wallet, track your wallet, see all your purchases. You don't want your IT department to mess with your wallet. BYOD is dead as soon as Apple Pay takes off.
CIO.com: Companies have tried to turn the phone into a mobile wallet for more than a decade. Most people don't have a problem with swiping a traditional credit card. What are Apple Pay's chances?
Cohen: Apple has the scale to make it work. Because iPhone is such a closed garden, there's also a security advantage. I wouldn't put all my credit card information on an Android device; it's open-source and you don't really know what version you're running. With iPhone and the iOS platform, you get a much more controlled environment, which is more appropriate for doing transactions.
Apple is coming at this at the right time. The younger generation doesn't like to carry lots of things. They don't like to carry cash. They don't like to carry plastic. They don't like to carry bags all around. Remember how big your dad's wallet was? How does it compare with your wallet? Oddly enough, the phone is getting bigger and bigger, but now there's not enough room for both the phone and wallet in your pocket. Maybe that's why Apple is making the phone bigger to boost Apple Pay (laughs).
It's not going to be easy for Apple. It'll take a few years. But if they continue to execute on it, I think it'll really reshape the way people buy.
The zig-zag of the story is that you'll need to go back to two devices, at least for a little while: one for work where you may have your business wallet, and another for yourself. I was talking to Uber drivers. Did you know drivers are getting an iPhone from Uber with all the software on it? Drivers don't want to give Uber their phone. That's what I think will increasingly happen.
CIO.com: Won't vendors come up with a double wallet on a single phone?
Cohen: They'll eventually come up with it. But there's a trust issue between the employer and employee, which is killing BYOD. It's going to come into play reasonably quickly, as soon as somebody starts using Apple Play. Folks will be less and less willing to be a part of the BYOD program. I've seen stories where, by mistake, the IT department deleted everything on an iPhone, including the photos of a departing employee. It's a strained relationship.