CUPERTINO, Calif.—With the Apple Watch now officially in the market—albeit sold out for at least a month—for financial institutions the question isn’t when new inventory will be available but whether it marks the next major advancement in mobile payments.
Analysts are split on that, with some saying Apple Watch will give a big lift to Apple Pay and become the channel of choice for payments, while others think the watch’s primary uses will be far from payments, as people stick with their phones when paying at the point of sale.
Early signs show strong consumer interest with online pre-orders for the watch—which comes in two sizes, is made of three materials, and has a host of band choices—selling out in under six hours. The watch is priced from $349 to as much as $17,000 for a version made of gold.
Analysts say it will take time for consumers to determine what they will primarily use the watch for. In addition to handling mobile payments Apple Watch monitors heart rates, connects with fitness programs, shares photos, sends and receive calls via an iPhone, and a lot more.
Watch Price Higher Than Phone
“It’s interesting that the watch’s cost is more than a smartphone but it has the same capability,” said Jeremiah Lotz, VP of digital experience and payments for PSCU in St. Petersburg, Fla. “Cost and use case will be the determining factors—time will tell which use case people are willing to pay that amount of money for. For example, will they see it more as a fitness tool, a payments device, a way to receive notifications or something else?”
At least three CUs have rolled out SmartwearApps for the Apple Watch. Malauzai Software said it is working with Alabama Teachers CU in Gadsen, Ala., and Greater TEXAS FCU and its division, Aggieland CU, here to provide members who purchase an Apple Watch with easy access to their most relevant banking information, including balances, transaction history for all available accounts and a branch locator.
Charlotte Metro FCU, Charlotte, N.C., has launched an Apple Watch app that delivers account balances, transaction history with running balances and loan payment due information.
While there has been a great deal of attention paid to Apple Pay and its acceptance following its launch late last year, some question how well the new payments solution is actually doing.
Apple Pay The Winner?
Dan Schatt, formerly of PayPal, and author of the book Virtual Banking: A Guide to Innovation & Partnering,” in remarks to PSCU’s MoPRO conference in New York, pointed to a problem with Apple Pay.
“I’m still not convinced Apple Pay will be the winner (in mobile payments), because they have just 15% of the market with iPhones.”
Whether Apple Watch gives Apple Pay a big boost will be decided by consumers in the coming year. And as many experts have said in the past, “Don’ bet against Apple.”