“The key important factor here is that Apple is upgrading to EMV readiness in the United States,” says Rick Oglesby, senior analyst at Double Diamond Group, a Denver-based payments consulting firm. “They are obviously a pretty large merchant so we can add them to the list of large merchants that are going EMV-ready in advance of the deadline.”

The move also is important to VeriFone, Oglesby notes. “Any movement towards EMV migration is important for VeriFone, which is in a position to make a lot of money during the transition,” he says. “Having Apple on its books as a customer will be an additional boost for VeriFone since Apple is perceived to be a trendsetter in the market and other companies are likely to follow Apple’s lead.”

Apple is keenly watched for any movement within payments, with Tim Cook, its chief executive, earlier this year calling mobile payments “a big opportunity on the platform.”

Though the adoption of EMV-capable mPOS hardware is notable, what it does not portend is anything specific about Apple’s potential long-term digital-wallet strategy or the inclusion of NFC on future iPhone models, Oglesby says.

“NFC is already included in the VeriFone off-the-shelf sleds, and the [card] networks incentivize merchants to adopt NFC/contactless technology within the EMV migration roadmap,” he says. “It therefore wouldn’t make sense to purchase non-NFC sleds which would need to be custom-made, would cost more, and would delay the implementation schedule. Therefore, we can’t draw any conclusions regarding the future of Apple and NFC based on this change.”

The cessation of Square Wallet is not surprising, says Rick Oglesby, senior analyst at Double Diamond Consulting, a Denver-based payments consulting form.

“Square is in the process of transitioning from being a payments company to being a digital marketplace; that’s where the opportunity really lies,” Oglesby says. “Square Wallet as a stand-alone payment solution wasn’t wowing customers because customers aren’t really looking for new ways to pay. Rather, they are looking for new ways to shop. PayPal and eBay Inc. made each other successful because eBay provided the new way to shop and PayPal provided the new way to pay, they needed to happen together. The same can be said for Amazon and Amazon Payments, iTunes and the iTunes wallet, etc. It’s exceedingly difficult to create new ways to pay unless you are simultaneously creating a new way to shop.”

Square Order is an attempt to merge shopping and payments, he says. “If they can drive consumer adoption of ordering ahead then they’ll get consumer enrollment in the app that they can in the future just use for enhanced in-store non pre-ordered shopping experiences,” Oglesby says. “This will bring a staircase approach to changing payment behavior rather than trying to jump to the next stage.”

Digital Transactions, May 12, 2014
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