the primary way most Americans are currently experiencing the great fintech boom isn’t through Apple or Android Pay at all, but through proprietary payment apps from chains such as Target, Walmart, and Starbucks
In strategic terms, my strawman assumption is that retailers are going to get rid of payments at POS and shift to payments inside their own apps, apps that they use to deliver better customer services. Or, in the bumper-sticker version, “we’re going from check-out to check-in”.
Tesco's move makes it the latest grocer to develop its own technology to bypass the costly Android and Apple systems. Sainsbury's for instance is trialling its SmartShop app which allows users to create their own shopping lists, navigate stores and make payments at dedicated kiosks, while Walmart has launched its own system in the US to expand customer payment options and increase the speed of checkouts in its stores.
A Comscore survey in April 2016 found that 55% of American consumers would be happy to have four or more retailer apps on their phone. Now, I don’t remember the figures exactly, and a quick search on my laptop can’t find them, but I remember something I looked at for a UK client a couple of years ago where it turned out that something like 90% of household disposable income in the UK goes to five retailers per household. In my house, for example, a Waitrose app, a BP app, a Martins’ the newsagent app, a Boots app and a Tesco Metro app would pretty much take care of things.
In the in-app vision of the future, consumers wouldn’t have hundreds of apps for every retailer. For the retailers they visit frequently (e.g., Starbucks) they will have the retailer app and use it. In other cases they will just use their bank app or some third-party payment app (e.g., Venmo). Actually, Venmo is a good example, since they have already made it plain that they see in-app payments are the future.
[Venmo] noted that it just doesn’t have the resources to support the API anymore, as it’s too busy working on its new peer-to-peer platform and its in-app payment service
Apple CEO Tim Cook explains the benefits of Apple Pay in apps.
So I’m hardly reading the tea leaves by saying that tap and paying with mobile phones may not, in the great scheme of things, be that important.