Apple Pay launched in October 2014 addressing consumer pains with traditional payments like theft, fraud, and losing physical wallets. Apple's business model provides seamless, secure mobile payments through iPhone users, over 200 banks, 220,000 merchants, and credit card networks without collecting consumer data or charging fees to participants. This mobilizes the entire payments ecosystem in a way other solutions have not by focusing on user experience over self-interest.

1. Apple Pay: Part 2
How Apple Pay’s Uncopyable
Business Model Delivers What
Nobody Else Could
C O D I F I E D N EWS

2. After more than a month
since it was announced,
last Monday (October 20, 2014)
Apple launched…

3. Pay

4. It addresses some
serious consumer pains…

5. …and might even eventually
replace the wallet.

6. Apple Pay:
An Obvious Value Proposition
Completely
private
transactions
NFC Antenna
Touch ID
Purchase Goods
Carrying cash,
cards, and
wallets
Theft & Fraud
Credit/debit
card
tokenization
Fingerprint ID
Dynamic
transaction
security codes
Photo ID
required
Cards don’t
read properly
Credit/debit
cards are
insecure Losing your
wallet, cards,
and cash
Protect
Finances
Never carry a
wallet, cards, or
cash again
Fast checkout
at retail stores
Never have to
cancel a card
ever again
Suspend
payments on
device
Transaction
data is kept
private
Shop anywhere
One tap
checkout
220K merchants
and growing
Store and
manage cards
digitally
Passbook App
Find My iPhone
By better understanding
consumers, Apple designed a
better value proposition!

7. But they didn’t just design
a better value proposition, they
designed a better business model!

8. Though the value
proposition is obvious…
…the business model is a
bit less understood.

9. “Most people that have
worked on this have started
by focusing on creating a
business model that was
centered on their self-interest
instead of focusing on the
user experience.”
– Tim Cook

10. Other solutions seek to
collect consumer data and
save on swipe fees by
cutting out the banks altogether!

11. So how is Apple building
an uncopyable business
model that delivers what
nobody else could?

12. Comple
NFC
Touch
Purcha
Carryin Theft &
Fingerp
Credit/ Dynami
Photo Cards
Credit/
Losing
Protect
Never Fast
Never
Suspen
Transac
Shop
One tap 220K
Store
Passbo
Find My
Apple Pay
Seamle
iPhone
- Zoom
With a better value
proposition in place…
…we can zoom out to the
business model level…

13. Apple Pay
Seamless,
Secure Mobile
Payments
iPhone 6 &
Apple Watch
Owners
?
?
Passbook Apple Pay
System
?
?
?
…to understand the
value Apple is creating
for its business.
Touch ID
iTunes Users w/
Stored Credit
Cards

14. 220K Merchants
(McDonalds,
Walgreens)
Apple Pay
Seamless,
Secure Mobile
Payments
iPhone 6 &
Apple Watch
Owners
Issuing Banks
(Chase, BofA,
Citi Bank)
Passbook Apple Pay
System
Touch ID
iTunes Users w/
Stored Credit
Cards
Apple delivers to
consumers through 200+
Banks and 220K Merchants
220K Merchants
(McDonalds,
Walgreens)

15. 220K Merchants
(McDonalds,
Walgreens)
Apple Pay
Seamless,
Secure Mobile
Payments
iPhone 6 &
Apple Watch
Owners
Issuing Banks
(Chase, BofA,
Citi Bank)
Free - $0
Passbook Apple Pay
System
Touch ID
iTunes Users w/
Stored Credit
Cards
Apple collects nothing
from the consumer
220K Merchants
(McDonalds,
Walgreens)

16. Apple Pay
Seamless,
Secure Mobile
Payments
220K Merchants
(McDonalds,
Walgreens)
iPhone 6 &
Apple Watch
Owners
Merchants Access to
Issuing Banks
(Chase, BofA,
Citi Bank)
Free - $0
Mobile
Customers
Passbook Apple Pay
System
Touch ID
Merchants
(McDonalds,
Walgreens)
iTunes Users w/
Stored Credit
Cards
Merchants want access to
the growing mobile
payments market

17. Apple Pay
Seamless,
Secure Mobile
Payments
220K Merchants
(McDonalds,
Walgreens)
iPhone 6 &
Apple Watch
Owners
Merchants Access to
Issuing Banks
(Chase, BofA,
Citi Bank)
Free - $0
Mobile
Customers
Passbook Apple Pay
System
Touch ID
Merchants
(McDonalds,
Walgreens)
iTunes Users w/
Stored Credit
Cards
Merchants pay nothing
to Apple for this access
Free - $0

18. Apple Pay
Seamless,
Secure Mobile
Payments
220K Merchants
(McDonalds,
Walgreens)
iPhone 6 &
Apple Watch
Owners
Merchants Access to
Issuing Banks
(Chase, BofA,
Citi Bank)
Free - $0
Mobile
Customers
Process
Payments
Passbook Apple Pay
System
Touch ID
Card Networks
(AMEX, Visa,
MasterCard)
Merchants
(McDonalds,
Walgreens)
iTunes Users w/
Stored Credit
Cards
Issuing Banks
(Chase, BofA,
Citi Bank)
Apple allows transactions
to be processed…
Card Networks
(AMEX, Visa,
MasterCard) Issuing Banks
(Chase, BofA,
Citi Bank)
…and delivered in the
traditional manner.
Free - $0

19. Issuing Banks
(Chase, BofA,
Citi Bank)
Apple Pay
Seamless,
Secure Mobile
Payments
Merchants
(McDonalds,
Walgreens)
iPhone 6 &
Apple Watch
Owners
Issuing banks want tighter
Issuing Banks
(Chase, BofA,
Citi Bank)
fraud protection
Cards Card Networks
Free - $0
Merchants
(220,000+)
Free - $0
Access to
Mobile
Customers
Secure Mobile
Transactions
Process
Payments
Passbook Apple Pay
System
Touch ID
Card Networks
(AMEX, Visa,
MasterCard)
Issuing Banks
(Chase, BofA,
Citi Bank)
Merchants
(McDonalds,
Walgreens)
iTunes Users w/
Stored Credit
(AMEX, Visa,
MasterCard) Issuing Banks
(Chase, BofA,
Citi Bank)

20. Issuing Banks
(Chase, BofA,
Citi Bank)
Apple Pay
Seamless,
Secure Mobile
Payments
Merchants
(McDonalds,
Walgreens)
iPhone 6 &
Apple Watch
Owners
Issuing Banks
(Chase, BofA,
Citi Bank)
Cards Card Networks
Free - $0
Merchants
(220,000+)
Card Networks
(AMEX, Visa,
MasterCard)
Free - $0
Access to
Mobile
Customers
Secure Mobile
Transactions
Process
Payments
Passbook Apple Pay
System
Touch ID
Card Networks
(AMEX, Visa,
MasterCard)
Issuing Banks
(Chase, BofA,
Citi Bank)
Merchants
(McDonalds,
Walgreens)
iTunes Users w/
Stored Credit
(AMEX, Visa,
MasterCard) Issuing Banks
(Chase, BofA,
Citi Bank)
Card Networks
(AMEX, Visa,
MasterCard)
Card Networks introduced industry
standards for implementing Apple’s
dynamic security codes

21. Issuing Banks
(Chase, BofA,
Citi Bank)
Apple Pay
Seamless,
Secure Mobile
Payments
Merchants
(McDonalds,
Walgreens)
iPhone 6 &
Apple Watch
Owners
Issuing Banks
(Chase, BofA,
Citi Bank)
Cards Card Networks
Free - $0
Merchants
(220,000+)
Card Networks
(AMEX, Visa,
MasterCard)
The Issuing Banks are
willing to pay the fee to
reduce fraud costs
Free - $0
Access to
Mobile
Customers
Secure Mobile
Transactions
Process
Payments
Passbook Apple Pay
System
Touch ID
Card Networks
(AMEX, Visa,
MasterCard)
Issuing Banks
(Chase, BofA,
Citi Bank)
Merchants
(McDonalds,
Walgreens)
iTunes Users w/
Stored Credit
(AMEX, Visa,
MasterCard) Issuing Banks
(Chase, BofA,
Citi Bank)
Card Networks
(AMEX, Visa,
MasterCard)
0.15 - 0.25% Fee
Per Transaction

22. Apple enables the payments
ecosystem with its technology
instead of trying to bypass it!

23. Pay
“Mobilizes” the entire payments ecosystem
getting merchants, banks, and card networks
to cooperate in a way only Apple can.

24. Author: Benson Garner
Content Direction: Alexander Osterwalder
Design: Federico Galindo
Art Direction: Alan Smith
Additional Input: Alan Smith
C O D I F I E D N EWS

25. B Y
C O D I F I E D N EWS