I'm still digesting and re-sorting my thoughts on the recent Apple event on September 9. I'll post more as my thoughts crystallize. I did have one thing that occurred to me this morning that I want to share.
A horse is a horse, of course, of course!
Right now, consumers have only one choice if they do not wish to pay full price for a new phone: a two-year contract with a carrier in exchange for a reduced-price on the device. $199 is a lot easier for many to come up with than, say, $659, and so everyone wins, or at least thinks they do.
But what if there were a way to get a subsidized phone with no contract?
We have a major problem in America with credit card fraud. If someone uses my credit card to book a trip around the world, I contest it, maybe file a legal document of some kind, I'm not held liable, the card is replaced, and life goes on for me. For Visa or AMEX, the work has just begun -- collating their transaction info, developing triggers for inconsistent use of my card, finding the balance between reasonable levels of loss and unreasonable intrusion into customers lives.
To an industry who sees upwards of $200B in losses and expenses due to fraud anually, and customers and vendors who help pay for that loss thru the teeth, it's in everyone's interest to reduce this problem. Safeguard your numbers. Sign your cards. Require signatures and ID when conducting purchases. Get the CVV2 number and zip code. Report lost cards promptly. Scan each and every transaction for weird, out-of-place events for each and every customer (I would hate to be the Visa elves at Christmas). Investigate claims of fraud for veracity. Report on credit. Unreport on credit. Check your credit. The list goes on and on and on.
So what if you were American Express or Visa or Master Card or Discover, and someone came to you and said, "Hey! I have a way to complete transactions without any party but you and your customer knowing the details necessary to conduct it. And, I have a way to exponentially increase the confidence that the person conducting that transaction is indeed the individual authorized to do so. BTW, I've got xx million customers I can bring to the table, ready-to-go, and I can sell this to them easily. If you pay me a few pennies per transaction, we're ready to go."
Wouldn't you love to give this a try? And, what then if the security and design of Apple Pay were to measurably reduce fraud... and thereby reduce the cost of doing business and reduce the loss of customer goodwill?
It is most certainly conceivable that a decent drop in losses would be worth, say, $200? $300$ $400? worth of a discount toward the purchase of a new device which curbs the billions of dollars of losses due to chargebacks, theft, and scams every year?
Did you ever wonder if you could reduce the risk of credit card theft by simply paying your bill with the flick of your wrist? Or receive a replacement credit card immediately, while still standing in line at the store? Did you ever think it would be possible for you to have an brand new, unlocked GSM iPhone 6 still only cost you $199 with no contract?
And the company that will bring it to you will be Apple-Citi.