If you haven't noticed, credit card companies and banks seem to absolutely love Apple's (NASDAQ:AAPL) new mobile payment technology, Apple Pay. A growing number of lenders are showing their approval of the new technology with Apple Pay promotions and advertisements.
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One of the latest advertisements to make the rounds is a MasterCard commercial featuring Gwen Stefani.
"Grammy Award-winner Gwen Stefani is taking control of the Priceless Surprises launcher to help surprise cardholders every time they swipe, dip, tap or click with their MasterCard," the credit card company said in a press release Monday. The surprises for those using their MasterCard with Apple Pay will include "everything from handbags and golf experiences to concert tickets, and even a chance to hang out with Gwen Stefani herself," according to the release.
Wells Fargo has been one of the biggest advocates for Apple Pay. The bank is conducting an email campaign to customers about the new mobile payment technology, along with airing promotions and advertisements on its website and on TV.
JPMorgan Chase has also released a series of Apple Pay ads and promotions for its Chase-branded credit card.
Why are lenders so supportive of Apple Pay? First and foremost, Apple Pay is not trying to leap over the existing credit card system and create something entirely new. With Apple Pay, credit card companies keep their lucrative merchant fees. Consider that against the Merchant Customer Exchange group's CurrentC, which emphasizes store credit and direct withdrawals from customer checking accounts -- two methods that avoid merchant credit card fees. Unsurprisingly, execs from MasterCard and Visa have indicated to Re/code writer Jason Del Rey that they won't support the technology anytime soon. Apple Pay's alignment with the interests of credit card companies is key to their participation and excitement about the technology.
Apple contends that it's the wallet that needed disruption, not the credit card system. By letting consumers keep their cash back and rewards, and simply making credit card transactions more consumer-friendly, the company seems to have successfully convinced lenders to help accelerate the adoption of Apple Pay.
Second, while Apple will collect undisclosed fees for Apple Pay transactions that are independently negotiated with banks and credit card companies, lenders might make up for the fees with fewer fraud cases and higher spending. Apple Pay ads a layer of security to traditional credit card payments by using tokenization, which keeps credit card numbers secure, and by verifying identity with Touch ID. The mobile payment technology also gives lenders a formidable inroad into the fast-growing mobile channel.
Convincing all major merchants to use Apple Pay, however, won't be as easy. Apple Pay has done nothing to help merchants reduce the fees they pay for credit card transactions. Sure, Apple has some massive retail partners on board, including Walgreen, Whole Foods, Walt Disney, and McDonald's. But notably absent from Apple's first retailers is retail giant Wal-Mart, a member of the Merchant Customer Exchange and CurrentC supporter. Bringing all the major retailers on board will be key for Apple in taking the service mainstream.
That said, early signs of success for Apple Pay and a subsequent boost for other near-field communications-based mobile payment services suggest the technology is here to stay. Pair that with lenders that are seemingly enthusiastic about Apple Pay's prospects, and NFC mobile payment technology looks like it has a decent chance at catching on with the masses.