Latest iPhone Threatens To Slow Down Mobile Payment Adoption

There has been tons of hype and buzz regarding Apple’s iPhone 8 which is expected to be showcased to the world on September 12th at the newly minted Steve Jobs Theater.

Some of newest features which have grabbed the public’s attention have been an all-screen OLED screen, removal of the iconic Home button, wireless battery charging, and a new system-on-a-chip. While most consumers will view the removal of the home button as a necessary step towards slimming the form factor of mobile device even further, it’s important to look at how this decision can impede the adoption rate of mobile payments moving forward.

Removal of the home button means that biometric scan (Touch ID fingerprint authentication) is a thing of the past. Instead, Apple will be relying on 3D facial recognition sensors. This means that the next time you try to pay something with your phone, you’ll need to stare straight at the screen versus placing your finger on the button.

Some tech reports suggest that Apple made the decision to remove biometric scan functionality from their OLED screen since they weren’t able to perfect the technology, which entailed vibrating the front screen to detect a fingerprint.

Does facial recognition equal a frictionless experience?

For millennials accustomed to broadcasting stories every day using Snapchat and Instagram, it appears that the adoption curve won’t be as steep. But for others, it will be the first time for them to use their front-facing camera. Another important factor is how sophisticated and accurate is the facial recognition software that Apple will be using to authorize payments with their latest iPhone.

When you think about how NEXUS using retina scan for its members, its practically foolproof because it’s in a controlled environment at the airport. Banks are also starting to experiment with facial scan authentications for ATM machines which makes sense since it saves the consumer the trouble of having to take out their ATM card to make an ATM transaction.

But what happens if you are in a retail or convenience store which has very poor lighting and the phone camera has difficulties detecting your facial features to authorize the payment. While I’m sure that Apple has made these considerations, it’s absolutely crucial that the mobile payment experience needs to be as easy as taking a credit card from your wallet. If it’s not, you have a lost conversion.

The impact to mobile payment adoption

Recent statistics show that 83 percent of Canadians have a smartphone – which they use to shop online, pay for items in store, and do their banking. In fact, we are so connected to our phones that 77 per cent of us would never leave home without it.

With that kind of dependency, it’s not surprising that Canadians are embracing their phones as payment devices. Canada has one of the highest penetrations of card-based payments in the world – more than 70 per cent of personal purchases in Canada are card-based.

However, Apple’s decision to omit biometric scan on their latest iPhone may slow down Canada’s pace to moving toward become cashless if the new payment experience becomes a pain point for mobile consumers.

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