iPhone 7: Implications on Financial Services

 

It’s no secret that since the first iPhone was launched in 2007 it has inadvertently transformed the way we go about our banking activities. Prior to the proliferation of apps, mobile banking was almost unheard of, these days if you are any bank of note you are likely to have a mobile banking app.

While many would argue that iPhone is no longer in the forefront of innovation, with over 1 billion units sold as of July 2016 it is a large user base to ignore completely. One of the main contentions of many people in this new iteration of iPhone is the removal of the audio jack and the introduction of Airpods.

While it may serve as a mere nuisance for it ordinary users, the implications for mPOS solution providers a far wider reaching. Ever since Square pushed this innovation to the market we’ve observed many local versions of Square in various countries enabling small to medium size merchants to accept credit cards and creating a society that’s more cashless.

According to research by Credence Research the mPOS market is predicted to reach 43.32 billion by 2022, with most mPOS players relying on the audio jack to read the cards, one wonders if Apple’s move to remove the jack from its iPhone will put a dent on the numbers.

While some players are still reeling in the news, players like CardFlight is quick to respond by issuing a public statement that their system will be compatible with iPhone through bluetooth.

Whereas Square has not issued any statements adapting bluetooth and instead will be relying on the adapters.

 

“Headphone jack adapters will work with the Square Reader,” says Leslie Jackson, a spokesperson with Square.

“We anticipate many types of headphone jack adapters will become available and will work to create the best solution for our sellers.”

While the adapter seems like a viable option, will it work awkwardly? The Apple adapter is not designed to create an anchoring to the force needed to be exerted to read a payment card.

Will the other players follow suit with bluetooth or will they rely on the adapters? Perhaps they will ignore the user base altogether?

At this juncture its really difficult to tell, with Apple’s steadily declining market share of 11.8% as of Q2 of 2016 and Android market share being more than 80% would it really be worth it for the players to re-engineer their systems to fit the new iPhone 7? This is especially since the iPhone 7 is yet be officially sold and there is no clarity on whether their will be many users switching from their earlier iPhones to iPhone 7.

However, on the flipside as an mPOS player if you do not make your system ubiquitous do you risk having the banks and merchants reconsider their relationship with you? Either way, the next few months will be an interesting one to observe.

Side note: There’s also this image circulating social media – what do you guys think, is there any meat to these claims? Let me know in the comments below

(This article was first published at BankTech Asia)

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