PHOENIX Bank of America was quick to address an early issue with double-charging Apple Pay users, but the damage to consumers' perception of mobile payment technology may prove to be longer-lasting if more glitches occur.
Mobile wallets have been available for years, but have never inspired widespread adoption. Apple's new mobile wallet, launched Oct. 20, could finally breathe life into the technology, but only if its supporters in the payments industry are quick to address its issues.
Many companies worked to develop what they hoped would be a "perfect launch," but it still didn't happen, said Jim Hanisch, executive vice president of the CO-OP Network, as part of a discussion at SourceMedia's PayThink conference this week in Arizona.
Hanisch and his peers expected that problems would occur, given the complexity of the Apple Pay system and the number of stakeholders involved. "We've all been doing payments a long time and we should know that new technology takes some time to work its way out," he said.
But this complexity also works in Apple Pay's favor, since there are many companies determined to make sure their role in the mobile wallet works as advertised.
"All stakeholders will move to correct [problems] and work to establish consumer confidence," said Pete Korpady, general manager of First Data's Star debit network.
The earliest reported snafus involved some instances of double-charging of Apple Pay transactions made with Bank of America cards. The Charlotte-based banking company acknowledged the problem, but said it was limited in scope.
Google Wallet underwent similar scrutiny upon its launch, and researchers uncovered at least two security issues early on.
The discussion at PayThink took place just as reports of the B of A glitch were surfacing. Even though he hadn't had the chance to confirm the reports, Leland S. Englebardt II, MasterCard's group head of global network products, said any type of first-week technical glitches should be resolved quickly.
"If there are hiccups, everyone involved is addressing it immediately," Englebardt said. "It's evidence that wherever problems exist, there will be a lot of cooperation to address it."
Englebardt said detractors continue looking for ways to deny the significance of Apple Pay, and thus any short-term technical issues might get a bigger spotlight.
"MasterCard is delighted to be part of Apple Pay, and I think it's a seismic development because it brought mobile front and center," Englebardt said. "Mobile payment is no longer a side show."
Visa also views Apple Pay as a turning point, mostly because of the technology it brings into place for advancing mobile payments and making transactions more secure.
"It's a wonderful convergence of technology, in leveraging the emerging technology of tokenization," said Bob Whyte, Visa's head of consumer products for North America.
As much as anything, it would be unwise for a financial institution to let early technical glitches scare it away from mobile payments, even for a bank that sits on the fence about whether to participate in Apple Pay.
"We see it as just another entry in a very crowded mobile payment space," admitted Bob Woodbury, senior vice president and general manager of the NYCE network. "But it has its place and some of your customers are going to want to pay with Apple Pay."
Other mobile payment systems will continue to evolve and banks or credit unions can't be left behind, Woodbury said.
Echoing a theme heard often at the PayThink conference, Woobury said, "We believe financial institutions should concentrate on their own mobile payment strategy."