Apple CEO Tim Cook wants to end money — and everyone working in financial technology should...

02-24 21:30
  • Apple's CEO says he hopes to be alive to see the end of money.
  • 16% of iPhone users have Apple Pay turned on, according to a recent estimate from Loup Ventures.
  • Apple Pay is a project that doesn't need to generate large revenue.

If Apple CEO Tim Cook had his way, he would never use cash again — and he thinks there's a chance that it could actually happen.

"What I believe is I think I'm hoping that I'm still going to be alive to see the elimination of money," he said earlier this month at a meeting for Apple shareholders in Cupertino, California.

"Because why would you have this stuff! Why go through all the expense of printing this stuff and then some people steal it, and you've got to worry about counterfeits and all these things," he continued.

As Apple's CEO talked about the downsides of cash, he became more animated, revealing real passion about the topic. Apple isn't a major financial technology provider, but it does have a widely-used service called Apple Pay, which allows people with iPhones and Macs to link their credit cards to their Apple account.

"We can provide a solution for the customer that's simpler, more convenient, you don't carry around a wallet with a bunch of cards in it, or a purse with a bunch of cards in it," Cook said. "And it's more secure, if you've ever had your credit card ripped off, I'm sure a lot of you have, I have, it's not a good experience."

"So we've designed Apple Pay to take care of all of that basically, so you're not passing your card number around," he continued.

While Cook didn't reveal any plans for Apple Pay expansion, his passion for the service should be noted by everyone in the space.

A slow start


When Apple first launched Apple Pay in 2014, technologists imagined a world where people would stop carrying cash. Instead, all you'd need to pay for anything is your iPhone.

Three years later, that vision hasn't quite happened yet — people are still comfortable carrying around cash and paying for items with credit cards.

In fact, according to a new study from Loup Ventures , only 16% of active iPhone users — about 127 million in total— also use Apple Pay. There's a lot of room to grow.

Tim Cook isn't thrilled with the service's adoption, either. "Mobile payments have taken off slower than I personally would have thought if you would have asked me sitting here a few years ago," Cook said at the Apple shareholder's meeting.

Apple has shared some positive data points about Apple Pay over the past year. More than half of U.S. retail locations accept Apple Pay, Apple said earlier this month, and the number of active users doubled year-over-year, it said in October.

Over 90% of tap-to-pay style transactions using NFC technology are made with Apple's service, and three out of four of those purchases are made overseas, Apple said last summer.

Cook also sees Apple Pay as a global service. "However, what I've seen in the past 12 months or so is a very rapid adoption, particularly in parts of the world you might not guess," he continued.

Silver linings


While Americans may have been slow to adopt Apple Pay, the service has some strongholds around the world, Cook said.

"There are many countries that are ahead of the US in mobile payment adoption. One of those is Russia. One of those is China. Where people never really adopted the desktop, they went directly to mobile, those countries typically do better," he explained.

Another factor that may improve adoption is whether an iPhone or Apple Watch can be used to pay for public transportation, Cook said, in places like Japan.

It's in this context that some of Apple's more puzzling decisions surrounding Apple Pay start to make sense. Many people can't use Apple pay unless both banks and stores support it, so much of Apple Pay's growth will be driven by deals that allow the service to be used in places like London's Tube subway, gas stations, or Starbucks.

Apple Pay is currently available in 20 markets, according to a Wells Fargo research note.

So when payments companies like Clearhaus announce that 5,000 new stores in Scandinavia or 26 more banks now accept Apple Pay, that means that the number of people likely to use the service in those countries increases.

Plus, Apple's using carrots to get people to start using it over what's available. People who pay with Apple Pay now can unlock deals such as a $5 dollar gift card or free delivery with services like Postmates or Warby Parker.

And Apple may have put one of the final pieces in place last year with Apple Pay Cash, which allows iPhone users to send money from one person to another — a space that's closely associated with PayPal's Venmo.

All of these factors mean that Apple Pay is a slow-burn. It's not driving any sort of meaningful revenue for Apple yet, and it may never — instead, it's laying the groundwork for something in the future.

What that is remains a mystery. During the shareholder meeting, Cook was asked a question about cryptocurrency and he ignored it.

"I also tend to think that there are things that Apple could do in financial services that will reveal themselves to us as we spend more time in the payments area," he said.

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