A deep look inside Apple Pay’s matchmaker economics – Richard Schmalensee and David S. Evans

MIT Sloan Professor Richard Schmalensee

MIT Sloan Professor Richard Schmalensee

From Harvard Business Review

Standing on stage on September 9, 2014 at Apple’s Worldwide Developer’s Conference (WWDC), Tim Cook announced, “We’ve created an entirely new payment process, and we called it Apple Pay.” Cook displayed a video of a woman who held her iPhone 6, the company’s upcoming upgrade, near a payment terminal.  She paid in the blink of any eye. “That’s it,” Cook said, exclaiming twice over “just how fast and just how easy” the new payment method was. An Apple press release claimed the new service would “transform mobile payments.”

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Why Retailers Must (But Won’t) Succeed In Introducing Mobile Payment Systems — Catherine Tucker

MIT Sloan Professor Catherine Tucker

MIT Sloan Professor Catherine Tucker

From TechCrunch 

In the digital age, it’s critical for retailers to collect and manage customer data. This information is the key to providing personalization for any kind of shopping experience, as it allows retailers to understand customer preferences and analyze shopping histories.

Smartphone payment systems like Apple Pay are an important method of obtaining this data since they allow data collection across different retailers for the same individual. However, when the data is collected and controlled by a third party like Apple, it is risky for retailers. Read More »