Analysis of Mobile Payment Market: Value Propositions, Limitations, and Strategies

This case study analyzes the value propositions of Apple Pay for consumers and merchants, limitations that may prevent its widespread adoption, and advantages and weaknesses of Square and PayPal mobile card-swiping solutions. It also recommends strategies for Apple to assure widespread consumer adoption of Apple Pay.

CASE ANALYSIS
Case Study: The Mobile Payment
Marketplace: Goat Rodeo
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1. What is the value proposition that Apple Pay offers consumers? How about
merchants?
ANSWER:
In case of the consumers, Apple Pay offers convenience in terms of payments. For this the
company enables it consumers to wherever and whenever they want without any kind of physical
contact or physical card (Dalenberg & Blum, 2012). The consumers are free to complete their
transactions from their convenience as it has eliminated the need for the consumers to go to the
counters and pay their bills. Along with this the company also offers security to its consumers in
which the consumers are not required to carry the wallet or cards with them which helps them in
eliminating the risk of any kind of fraud and theft. The cards of the consumers are encrypted
due to which any of the consumer information shall not be transferred to the merchants at the
time of transactions. Next value proposition that is offered by Apple Pay to its consumers is
Privacy where the consumers who are the owners of the card have the access to it. The
transactions can only be completed by the owner of the cards through the fingerprint ID that is
very much secure. The cards of the consumers can also be stored digitally which is very secure.
Along with this it is also providing the ease of adoption by a very large number of merchants and
no or less additional costs associated with the transactions (Johnsson, 2017).
Along with the consumers the Apple pay has been offering good value propositions to its
merchants as well. Unlike the credit card companies that charge 2% to 3% fee from the
merchants the Apple Pay doesn’t charge such fee from its merchants. The merchants’ will
also be benefited through fewer lineups at theirs stores as the consumers will be paying their
bills through instant touch. There will be no need of card approval or slips of paper required

for the merchants. Along with that the merchants are also benefited through security in the
transactions.
2. What are some of the limitations of Apple Pay that might prevent its widespread
Adoption?
ANSWER:
Some of the limitations of the Apple Pay that might prevent its widespread adoption are as
follows:
 Firstly, is someone is willing to use Apple Pay one must have an Apple product that is
an iPhone 6 or a newer version or an Apple watch. The Apple Pay only works well with
the iOS devices that begin with iPhone 6. So, the consumers who use the android phones
or any other phones cannot make the use of the Apple Pay.
 Secondly, the merchants are not allowed to use the payment processes of Apple Pay for
any kind of additional marketing and advertising. Apple Pay prohibits the merchants to
use its services for any kind of marketing and advertising which cannot be a very good
idea for the merchant’s point of view. This limitation is not good for the merchants as
they always make efforts to market or advertise their products and services through
various ways (Sherman, 2017).
 Thirdly, it requires the purchases of NRC point of sale terminals. The Near Field
Communication which is a wireless technology that enables the chip in an iPhone and
other phones. The NFC is touted with the payment mechanism. For using Apple Pay NFC

is mandatory which scans the fingerprint and encryption and further enables in-store
payments by holding the iPhone to the payment terminal (Plant, 2000).
3. What advantages do the Square and PayPal mobile card-swiping solutions have?
in the mobile payment market? What are their weaknesses?
.
ANSWER:
It has been observed that the Square and PayPal have been out for a few years due to
which they received an advantage of having various consumer tests or marketing their
products and further verifying that their products and services were safe. Both PayPal and
Square do not use the NFC due to which the money of the consumers is saved. Square is
basically a plastic device that is plugged in to an Android phone or an iPhone and any
kind of card payment can be processed by it (Botha & Bothma, 2008). The product is
very comfortable to use as it gets fit in the pocket very easily.
On the other hand PayPal is also a very great concept. With the help of PayPal one can
purchase the products online from any website.
PROS or Advantages of PayPal
 PayPal is free for the buyers and they can be used anywhere that includes mobile
payments and online payments (Laudon, 2016). There are many buyers who use
PayPal for their online transactions as it is very safe to use the PayPal.

 It is very easy to get started with the PayPal. One can easily sign up with the
PayPal.
 The interest rates of the PayPal are also very good based on the credit.
 It is one of the easiest forms of payment and is a immediate payment method
from the bank account of the user (Poland, 2017).
 PayPal mobile device card readers are really quick to install, reliable and very
inexpensive.
 It supports online transactions like Amazon.
Limitations of PayPal
 The only limitation that is faced by the PayPal is security limitations that
any magnetic card reader device would face.
 Secondly, they require the consumer to carry a card with them.
 Another limitation is that as it is not a bank it sometimes fills the role of
bank but it does not adhere to the rules and regulations of the same.
Pros of Square
 Free Online store
 It has square wallet that is a e-wallet integration
 The square stand hardware in the square makes the iPad very effective

Limitations of Square
 Square does not support bulk transactions
 It does not have a mechanism to scan the barcodes
 The security of the square is not trustworthy.
4. What strategies would you recommend that Apple pursue in order to assure widespread
consumer adoption of Apple Pay?
ANSWER:
 The strategies that can be recommended for Apple to be pursued in order to assure
a widespread consumer adoption of Apple Pay are:
 It shall focus on increasing its presence in the e-commerce applications and
websites
 For those consumers who do not have an iPhone, Apple should think of cross
platform support in future.
 It shall try to grow with merchant services and help the merchants to sell their
products and services online.
Conclusion
It has been observed that the online payment marketplace is experiencing innovative plans,
announcements and ideas and is working great towards the enhancement of the future payment
market place.
Bibliography

Botha, J., & Bothma, H. (2008). Managing E-commerce in Business. Cape Town: Juta and Company Ltd.
Dalenberg, A., & Blum, J. (2012, August 13). The Pros and Cons of Mobile Payment Services. Retrieved March 15,
2018, from enterpreneur.com: https://www.entrepreneur.com/article/224181
Johnsson, M. (2017, May 18). merchant meverik. Retrieved March 15, 2018, from merchant meverick.com:
https://www.merchantmaverick.com/square-vs-paypal/
Laudon, K. C. (2016). Management Information Systems,. New York: Pearsons Publications.
Plant, R. (2000). Ecommerce: Formulation of Strategy. New York: Prentice Hall Professional, 2000.
Poland, A. (2017). CHron. Retrieved March 15, 2018, from Chron.com:
http://smallbusiness.chron.com/advantages-disadvantages-using-paypal-55073.html
Sherman, E. (2017). inc. Retrieved March 15, 2018, from inc.com: https://www.inc.com/erik-sherman/square-
still-too-expensive-in-2017-save-money-with.html