A few days ago, the rumors about the cooperation between Apple and UnionPay to promote NFC payment have caused many speculations in the industry. Many people hold optimistic views on the promotion of Apple mobile payment in China. But we also see that at least in the US, there are many mainstream retail brands that refuse to use ApplePay. Including fashion fashion brand H&M, electronic retail giant Best Buy, high-end consumer brand Coach, Sears department store and discount retailer Kmart, coffee chain Starbucks and so on. Although many optimists believe that this is the spring of NFC payments, the author's perspective on the success of Japan's NFC payment industry can justify the dilemma of ApplePay's landing in China.
We know that the industry chain involved in NFC near-field payment includes mobile phone operators, mobile phone manufacturers, chip manufacturers, banks, bank card organizations, and bank card acceptance terminals. Any enterprise that participates in the upstream and downstream of the industry chain cannot do it. Take it down the river. If Apple participates in the international market, the only mobile terminal equipment does not have a credit card device. Laying these devices one by one at various retailers' homes is very costly. In fact, this difficulty also exists in China. Many industry insiders also pointed out that NFC payment has to transform a large number of pos machines, which involves huge laying costs. Therefore, Apple wants ApplePay to enter China and cannot cooperate with UnionPay or operators. In China, the dominance of NFC payments must be placed on the side of UnionPay and operators.
Because of this, Apple is different from the strength of cooperation in other fields, and adopted a relatively low-key attitude in the cooperation of ApplePay. Apple is only responsible for end-user experience and payment security, and the purpose of Apple's mobile payment is also clear, that is, to enhance the use of Phone6/6Plus and future user stickiness.
The reason why ApplePay is popular in China needs to be led by the industry chain. Because the absolute industry chain dominance can ensure that the appeal of the strong side promotes the interests of the entire chain, and other parties have to participate. On the side of mobile payment, the huge user scale is the core. Here we look at the case of Japan's NFC mobile payment. Japan's mobile payment consists of user handheld terminals, payment services, and credit card terminals, while mobile payment services are mainly driven by NTTDOCOMO, Japan's largest operator. Of course, NTTDOCOMO's move to mobile payments is aimed at enhancing its user stickiness and its mobile business appeal. . This coincides with Apple's current means and purpose of promoting mobile payment. For example, we see that NTTDOCOMO is only playing the role of channel, the purpose is to increase the viscosity of users of NTTDOCOMO operators, and the profit comes from the service fee paid by the card issuer. And NTTDOCOMO does not participate in any client interface work for specific cards.
Apple's means of promoting mobile payment is also very similar to NTTDOCOMO. ApplePay is equivalent to tying up the card, and it will not deposit funds. The transaction will be delegated to the merchant. Apple acts only as a channel role, allowing the bank card to directly interface with the merchant's payment system. However, compared with NTTDOCOMO, Apple lacks NTTDOCOMO's large number of users in a single regional market. To know that NTTDOCOMO is the largest operator in Japan, the market share is about 45% in Japan. Moreover, NTTDOCOMO has the right to customize the mobile phone, and can smoothly insert Sony's felica payment chip into the mobile phone. The mobile phone customization right + mass users can ensure the voice of the NTTDOCOMO industry chain and the profit base of all parties, plus NTTDOCOMO promotes NFC payment. It is not a strategy of taking the upstream and downstream, but fully decentralizing the various ends of the industrial chain. For example, NTTDOCOMO only controls the mobile terminal business, and the payment service is handed over to the whole family, the East Japan Railway Company, and the merchants swipe the card to the financial institution. All parties in the industry chain keep their core business, so that the popularity of NFC payments can be rapidly promoted.
Although Apple's brand has great influence, Apple's disadvantage with respect to NTTDOCOMO is that its user base does not occupy a large scale in the Chinese market. Although Apple's iPhone6/plus is selling globally, according to previous analysts' forecasts, Apple will sell more than 60 million units by the end of this year, but these two phones still occupy a small amount of smartphone market share, while at home. iPhone6/plus users, compared to the entire domestic smartphone market, is a very small part. In terms of user conversion rate, the scale effect formed is relatively lacking. It will take time to grow to a large number of users in the future. In addition, in my opinion, Apple’s lack of innovation in mobile hardware technology is also overdrafting the Jobs brand halo effect, and Apple cannot Ensuring that the iPhone hardware will inevitably maintain a sustained high growth trend in the future. Coupled with China's national conditions and economic level, it is decided that the low-end and mid-range smartphones will dominate the smartphone market for a long period of time in the future. In the future, Apple's iPhone 6 and above will dominate the mainstream of China's smartphone market. Apple's high-end strategic positioning It is decided that its mobile terminal can only occupy a niche market, and the popularity of mobile payment still needs to be based on the mass mobile phone hardware users.
Looking at the cooperation of the industry chain, the condition that NTTDOCOMO, Japan's largest operator, can take the lead in promoting NFC is that operators have absolute dominant strength. At that time, the Japanese banking industry faced restructuring and the dilemma of huge non-performing assets, and it was innocent and incapable of operating with operators. Competing for the dominant power of mobile payments. At that time, the Japanese operator NTTDOCOMO's financial strength was far above the dilemma of Japanese commercial banks. In addition, NTTDOCOMO has the right to customize mobile phones and the mainstream mobile phone users. The mobile phones sold in the market are almost all customized by operators. The fastest NTF payment module for the most users' mobile phones, and the financial strength of NTTDOCOMO to take care of offline, such as Felica card readers for supermarkets, convenience stores, department stores, airports, theaters, etc. The installation service, together with NTTDOCOMO, does not want to take care of the industry chain, but ensures that all parties in the industry chain keep their core business and win-win cooperation, which makes Japanese NFC payment can be quickly popularized in a short time.
Apple's Applepay is going to land in China, and Apple wants to play a role similar to NTTDOCOMO, but Apple is unlikely to play a leading role. We know that UnionPay and operators have been competing for the dominant NFC mobile payment in China. The reason for the tug-of-war is that none of the strengths of the two sides can take the upper hand. The strength of domestic operators is not similar to NTTDOCOMO. The operators have the right to speak and the absolute strength of the banking industry. In the competition with China UnionPay, China Mobile is evenly matched in terms of financial strength and user control, which will inevitably lead to confrontation between the two camps. For example, China Mobile and UnionPay have their own mobile payment ecosystem. UnionPay has mobile phone external devices and POS card reader terminals, and has established a third-party payment platform. China Mobile has a customized mobile phone to control the user's payment terminal, as well as a third-party payment platform and its own POS card-swapping terminal. The dispute between operators and UnionPay's mobile payment standards has been long-lasting, but the NFC technical standards have been unified this year. Mobile payment is a cake that involves operators, banks, and Internet giants vying for it. Is there any reason for Apple to launch ApplePay to enter China and give it to Apple?
In addition, the popularity of mobile payment in Japan depends on the developed chain stores built by retail convenience stores such as 711, Rosen, and the whole family. Most of the micropayment scenarios occur in these convenience stores throughout Japan, and Edy in Japan. Small payment cards such as Suica have become very popular, and the Japanese government's control over micropayments has been relaxed. Therefore, the objective conditions for the popularization of mobile payment in Japan, namely, NFC payment scenarios, objective conditions, and policy factors are already in place. As mentioned above, NTTDOCOMO with financial strength and open mind has taken over the offline work, such as the installation of Felica readers for mass supermarkets, convenience stores, department stores, etc., which is the offline of NFC. basic condition.
Look at China, in the Chinese market, currently 10 million POS, only 3 million "flash payment" POS can support NFC. There is incremental space in the future, but the amount of offline promotion is huge. If ApplePay enters China, iPhone6 ​​and above hardware products occupy a niche market, and offline merchants want to promote a mobile payment service that needs to be popularized by a large number of mobile phone users. Apple lacks this user base.
As I mentioned earlier, Japan can quickly add NFC payment modules to almost all domestic users under the promotion of NTTDOCOMO. The huge number of mobile phone users means absolutely returning huge benefits to all parties in the industry chain. There are almost no barriers to installing Felica readers in the retail industry. In the United States, Starbucks and other chain brands said that it is temporarily unable to install high-cost NFC-paid devices at all outlets. Obviously, it is impossible for Apple to bear this huge expense on its own. However, if China UnionPay promotes NFC payment, it needs to transform a large number of POS machines, which involves huge costs, and it is inevitable to expect returns. However, Apple's high-end attributes determine that its user base can only occupy a high-quality but niche market. The lack of user base has led to the return of benefits, and it has also decided that it is only a castle in the air to promote mobile payment.
As mentioned earlier, Apple's ApplePay only wants to make channels, not relying on mobile phone payments to make money, and Apple's ApplePay is to put all security modules on the phone, trying to open up the operator, the role Apple wants to play, is similar to NTTDOCOMO The role of mobile payment in Japan will inevitably lead to a strong rebound in domestic operator channels. On the other hand, Apple's move into mobile payment is far from being as simple as speculation. It is not just a functional module integration, but a signal to enter the mobile finance sector. From the domestic perspective, the financial level involves national security, and it is unlikely that it will be released to foreign companies. From the perspective of user habits and usage scenarios, in China, NFC has not formed a large-scale user habit at this stage, and not many people are willing to integrate all credit card information into one mobile phone, even though Apple has TouchID fingerprint recognition + Token Token is a new technology for security on mobile payments, and can ensure payment security through ARM chip-level encryption and Token token network authentication.
In summary, although ApplePay has landed in China, there is no problem with technical docking, there is room for win-win, but the development of NFC payment, Apple users are far from reaching NTTDOCOMO can fully popularize the advantages of the most mobile phones overnight, so UnionPay and Apple's push for mobile payment cooperation can only cover a small user base, and operators do not have as many POS machines as UnionPay. On the other hand, China is far from achieving a developed format similar to Japan's chain retail industry. Although the large-scale popularization of the retail chain in the country will be the future, it is not the present.
The domestic industrial chain hopes that all the upstream and downstream will take all the benefits, lacking the ecological and soil environment of open cooperation and core business. The leader does not have the influence of NTTDOCOMO, which can lead to the influence of all parties. Absolute strength. In general, the development of NFC payment in Japan has objective factors of user demand, business form, policy, and industry maturity, and NTTDOCOMO is the market factor that dominates the trend and the unified access of all parties in the industry chain. However, in China, there are interests resistance or immature objective factors in the industrial chain, industry maturity, user habits, policies, business forms, etc. In summary, the rapid development of NFC in Japan just maps ApplePay in The dilemma of China's landing.
Although ApplePay has an imaginative space to promote the development of mobile payment, NFC is more convenient in terms of security, reading speed, payment methods, etc., and the cooperation between Apple and UnionPay can also bring demonstration effects to NFC payment, but Under China's unique national conditions and soil environment, the technically achievable problems are not problems, and the dispute of interests is the fundamental factor driving or hindering the development of the industry.
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