NYT details how Apple and the nation's top banks created Apple Pay in complete secrecy
Apple's effort to create a mobile payment system -- now known as Apple Pay -- truly began to pick up steam during the Summer 2013, according to the New York Times which yesterday published a fascinating account of the service's development over the last 12 months.
While many mobile payment start-ups are often intent on bypassing established players in the payments space, the Times relays that Apple's willingness to work with traditional financial institutions was welcomed by participating banks and is perhaps why Apple was able to receive favorable rates in the process.
While the Apple Pay process itself is relatively simple -- hold up your iPhone to a payment pad and verify your identity with Touch ID -- the work done behind the scenes was complex, required a tremendous amount of resources, and in typical Apple fashion, was kept as hush-hush as possible.
From the beginning, the project was top secret, with what one person involved called a "code name frenzy." The card companies had code names for Apple and Apple for the card companies. At Visa, the code name was another consumer electronics company, chosen to avert attention from employees who were not involved. Visa soon had about a thousand people on the team.
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JPMorgan, the largest card issuer in the country, set up a war room in a windowless conference room in San Francisco, where the most sensitive work was done. Only about 100 of the 300 JPMorgan employees working on the project knew that it was a partnership with Apple.
Interestingly enough, Apple's banking partners were completely in the dark as to what the payment service would even be called until Tim Cook mentioned the name on-stage this past Tuesday.
Apple Pay is slated to go live in October 2014 and it'll be interesting to see how quickly the service catches on with consumers, if at all. While we'll know the answer to that relatively soon, early impressions of the service have been overwhelmingly positive. Of course, the more merchants Apple can get on board the greater the odds of success. In a press release touting the impending arrival of Apple Pay, Apple indicated that 220,000 merchant locations will support the service at launch. On a related note, the Times relays that two of the country's biggest retail chains -- Walmart and Best Buy -- will not be supporting Apple Pay this fall.
The entire Times article is replete with behind the scenes info and is well worth a read.
