A major reason mobile payments have taken off is the availability of digital and e-wallets.
Users either link their payment cards to the wallet application or top it up with cash, then use the contactless facility of their phone to complete payments. Such services can also provide the means to make online payments through a mobile or desktop browser.
As well as facilitating payments, e-wallets are also capable of holding ID, membership and loyalty cards. E-wallet services encrypt data to keep it secure in transit, and also use secondary verification and anti-fraud technologies to guard against card misuse.
There are numerous examples of e-wallets but perhaps the best known are Apple Pay, Google Pay and PayPal. Two of these players are now looking to develop their e-wallet offerings further with the new offerings PayPal Credit and Apple Card.
The thinking behind these credit services is to expand beyond e-wallets into a broader set of financial services.
PayPal Credit can be automatically added to PayPal accounts, enabling users to check out at online stores with a few clicks. While not suitable for contactless payments, it is accepted at the same online stores that accept PayPal.
As well as the standard PayPal benefits, PayPal Credit also offers the ability to pay for goods of $99 or more over a six-month period, without being charged interest.
Apple, meanwhile, bills Apple Card as completely rethinking the humble credit card, with a range of additional services that create a compelling customer experience.
Available within Apple Pay, the Apple Card provides users with a visual breakdown of their spending by week, month or category, such as shopping or food and drinks. If users don’t recall a transaction, the app links to Apple Maps to show the location at which the payment took place.
While many credit cards offer rewards or points to users, Apple Card gives users ‘Daily Cash’ that they can spend immediately if they so wish.
When users want to pay their card balance, they can see how much interest they will need to pay if they don't pay off the full balance. There is no interest to pay if they pay off the full balance.
In terms of security, the card number is locked away in the secure element of the iPhone, with Face ID and Touch ID meaning only the phone owner can use the services. If they have a query or problem, users just need to send a text message meaning they don’t have to wait for an operator to pick up the phone or remember new security details.
There are no fees to pay while a laser-etched titanium Apple Card is also available if you want to use the credit services at a location which doesn’t accept Apple Pay.
While currently only available in the US, Apple is clearly aiming to become a bigger player in financial services and is using its hardware and software expertise and design acumen to provide a customer experience millions of people are likely to embrace.
Both PayPal Credit and Apple Card demonstrate how the classic e-wallet services we’ve become familiar with can be developed beyond their initial incarnation. Developments in mobile and digital payments technology has enabled technology players to tread on the toes of traditional banks and card schemes, ramp up competition and is creating new customer experiences in the process.