'Rivals' to Apple Pay Start to Join the Apple Bandwagon
If you can't beat them, join them and join them fast. The other mobile wallets that already exist on Apple's ecosystem, such as LevelUp and Softcard (formerly Isis), are quickly working to integrate with Apple Pay and the iPhone 6 rather than try to defeat them.
SCVNGR's LevelUp, which already uses Apple's iBeacon technology, will integrate directly into Apple's Passbook, making LevelUp a payment option alongside any bank cards consumers enroll. The telco-driven Softcard, which uses Near Field Communication technology on non-Apple devices, will enable NFC payments in the iPhone 6 in 2015 using an integrated SIM-based hardware system.
"The entry by Apple has raised awareness and attention, and it's an opportunity to ride the wave on whatever mobile initiative you have underway today," said Richard Crone, a payments consultant, who added that other wallets will benefit from the awareness and education that Apple will provide in its own launch.
LevelUp has also dabbled in wearable computing, and will support Apple's pending smartwatch, said Kate Reynolds, a spokesperson for LevelUp.
The Passbook integration will enable LevelUp users to pay directly from Apple's wallet and accrue or redeem loyalty rewards. For businesses that are using the LevelUp software development kit to power their own apps, the Passbook integration will become available in the next release of LevelUp's SDK in a few weeks.
LevelUp is also deploying new NFC scanners that look and work like its older scanners, and LevelUp will send a note to merchants in the next couple of weeks with upgrade instructions. LevelUp previously experimented with NFC in 2012, when it anticipated the technology would be part of that year's iPhone 5; its new scanners will support NFC payments from Apple and Android devices.
"That is huge because the NFC chip in iPhone 6 will enable customers to pay at any NFC-enabled terminal," Reynolds said. "[Apple Pay] will transform mobile from a 'nice to have' to a 'must have.' "
Softcard did not make an executive available for an interview by deadline, and said it would not provide more details beyond the announcement at this time.
Apple's brand alone will shine a much brighter spotlight on mobile payment technology. "It will bring a bunch of attention to the space," Reynolds said.
Apple will be a boon to rival payment systems in the near-term, analysts say.
"Because the market is so new at the moment, having lots of competition and large players in the market is a benefit rather than a hindrance, creating awareness among consumers," said Rick Oglesby, a senior analyst and consultant at Double Diamond Payments Research. "Creating awareness among consumers and driving behavioral change on a mass basis has been proven to be more than any one company can do on its own. But if many companies are all working in the same direction it becomes much more feasible."
Right now, Apple's rivals are in a better position than any financial companies that aren't trying to compete in this market, Crone said.
"The companies that should be concerned right now are the ones that don't have a strategy or a plan for mobile payments," Crone said. "They'll be the ones left behind. Apple's supply will create demand for all types of mobile payments processes."