Why Apple Pay is Not the Next Big Thing

It’s time to break from my usual posts about budgets, money, and living debt free, and instead talk about something that’s been on my mind lately: Apple Pay.  I’ve seen it in a few places and, despite having an iPhone, never had the desire to connect and pay by phone.  For those of you who aren’t sure what Apple Pay is, here’s a short video to get you up to speed from the Mashable geniuses.

I was shocked to find it at Panera.

There are a lot of reasons why I don’t think the Apple Pay system is the best, but I know that this is only the first version and that subsequent updates in the system will be more efficient.  There’s the fact that most iPhone screens are dirty and fingerprinted – this makes it hard for the phone to read your fingerprint occasionally.  There’s also the issue of having so many different types of merchants – retailers, busses, taxi’s, restaurants, and a limitless number of other places that accept various types of payment.  Considering Apple Pay is reaching large cities first, the diversity of what each retailer needs – and how they check you out – means that it must survive there before being more widely distributed.  I was shocked to find it at Panera.  But, let’s put all of it’s technical and strategical faults behind for now.

The reason why Apple Pay is not going to catch fire as much as we think is because Apple has, yet again, underestimated the severity of the economic state in major cities.  Sure, you’ll always have wealthy people who will want the next cool gadget, but the number of wealthy people, especially in places like New York City and Los Angeles, is undergoing a shift.  The middle class, tech-savvy 20 or 30 something, their friends and family, and their jobs are moving out of these cities.  I consider myself a part of this category, despite being on the poorer side income-wise, but most of my friends who aren’t from wealthy families are being priced out of New York City.  The rents are skyrocketing over $300 a month, and there is limited affordable housing.  If you’re wiling to sell your soul, find a job that lets you work 60 hours a week, and can make enough to afford rent + the $112 monthly metro card, price of food, and general exorbitant cost of living, you are still going to be only slightly above breaking even.  Living with roommates can cut down the cost of living immensely, but you don’t want to do that forever, and there is no long-term solution for us.

…but this time, it’s your real money flying out the window

The other thing that has convinced me that Apple Pay is not the next big thing is that it encourages us to spend.  You have the convenience of a credit card – except now it’s already in your hand.  Let’s face it, even when you’re walking down the street your hand is probably in your pocket around your iPhone, whether it’s to protect it from pick pockets or to pan through your iTunes playlist.  It’s a credit card glued to your hand… but this time, it’s your real money flying out the window.

With so many people in financial straits, and more of them becoming aware of their problems and scaling back, and then… enter the Millenials, the stingiest group of spenders ever tracked by economists – and they have good reason to be, considering they lived through the trauma of the housing bubble bursting and watched their parents’ retirement and stocks dip dangerously… I can’t imagine they’d want money to disappear out of their hands as easily as Apple Pay proclaims it can.

Freedom?  I think not!

Today’s shoppers are getting wise.  The most ironic thing?  Apple Pay showing the Chase Visa Freedom card on the home screen of the iPhone in their advertisements.

Freedom?  I don’t think so.

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