Company Case 10

Apple Pay: Taking Mobile Payments Mainstream

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Questions for Discussion

1. As completely as possible, sketch the value delivery network for Apple Pay.

The value delivery network is 1st that it is convenient. The same way credit cards and bank cards
changed how we carry money and pay for things, Apple Pay wants to take the next step forward.
Apple wants to make it so we have one less thing to carry and be more customer friendly. If Apple
could have it their way, we wouldn’t be carrying wallets at all and all payments would be made
through our mobile devices, rather than by card or dollars.
Apple is trying to bring this convenience to their consumers, but hasn’t really transcended like it
was intended too. With that being said, Apple Pay has been regarded as a solid step forward in
setting the trend.

Program Developers > Apple Pay (Service Provider) > Apple (Marketing, Distributor Channel) >
Consumer

2. With respect to Apple Pay, is Apple a producer, a consumer, or an intermediary?

Explain.

I believe that Apple pay is an intermediary because Apple is in between the services that are
being provided by Apple Pay, as well as Apple’s consumers. Apple Pay services have created a
new distribution platform that improve the consumer’s effectiveness and efficiency to shop. As
the book describes, an intermediary "is the link in the supply chain that links the producer or
other intermediaries to the end consumer.” So in this case Apple is the producer, Apple Pay is
the intermediary (or middleman), and the users of Apple Pay are the consumers.

3. Identify all the reasons why Apple’s partnerships are essential to the success of Apple
Pay.

Partnerships with retailers are essential for the success of Apple pay for a very simple reason, if
retailers do not accept that form of payment then consumers will not use the product. If retailers
do not accept Apple pay, it will quickly fail because that form of payment will not be an option.

4. With respect to marketing channels, what are some threats to Apple Pay’s future?

The biggest threat that Apple Pay faces is the lack of cooperation from retailers. Apple Pay is
making its way to be the alternative method of a physical credit card, it saves you the step of
actually swiping your card, and it provides a new form of security by requiring your fingerprint
in order to complete a transaction. According to paymentsleader.com “Apple is touting this
product as the future of payments and the most secure way of doing business.” Clearly the
cooperation of retailers is needed in their physical stores in order for that form of payment to
even be accepted, without the readers for apple pay, it would be pointless to have that form of
payment.