Many Apple Pay Customers Confuse Simplicity with Vulnerability

The iPhone and Apple Watch contain sophisticated security and encryption protocols for use with Apple Pay. To make it very easy for customers, Apple has brilliantly made the setup and use incredibly simple. Has that simplicity fooled customers into thinking that the Apple Pay process is risky and makes them vulnerable? A Pew study suggests that potential customers mistake the simplicity for various kinds of vulnerabilities, and they shy away.

Apple's Eddy Cue introduces Apple Pay.

Long ago, Apple correctly concluded that if the Apple Pay set up and use were too geeky, confusing and time consuming, no one would adopt it. The company was, of course, right. And so, Apple engineers created an exceptionally easy way to pair a personal credit card with the iPhone and its Apple Pay and NFC payment subsystem. For many young people, comfortable with other mobile operations, who did some casual reading and learned about Apple Pay basics and security, there hasn't been much of a problem.

However, a Pew study last month has uncovered some unsettling customer tendencies. "Who Uses Mobile Payments?" While the study found at 46 percent of American consumers have made a mobile payment, usually a purchase, it also found that....

Consumers often don’t know how mobile payments compare with other payment methods in terms of convenience, cost, privacy, and security.

The study goes on to point out that...

Millennials and Gen Xers in particular are motivated to use mobile payments in part because they like receiving rewards, discounts, alerts, and electronic receipts. Consumers are also interested in avoiding fees, such as overdraft or check cashing fees, and using their smartphones to help them budget.

However, the report also surfaced some concerns that consumers have about mobile payments. The biggest concern, shared across all age groups, is the loss of funds or identity theft. They also worry that retailers and others are collecting information about them, including "tracking their locations when they execute financial transactions."

The report concludes, in part....

Across generations, concern about the safety of mobile payments technology is the biggest obstacle to use. Specifically, consumers are concerned about the potential for identity theft or loss of funds. ....concerns and uncertainty about the safety of mobile transactions and the lack of systems for depositing cash directly onto mobile websites and smartphone apps may be holding back this technology. Addressing these deficiencies could increase adoption....

Technological Myths

Part of the problem here may well be that Apple has done too good a job hiding the technical details of the transaction which could, by their process, provide warm fuzzies to the consumer about the technical means used to protect them. It's a double-edged sword, however. If the friction in activation and use is too high, consumers won't take the time to activate Apple Pay.

Another part of the problem is that the ease of activation, use and user interface often leads Apple customers to make incorrect technical assumptions.

  • If one takes a picture of the credit card in the Wallet app, the number must be stored in the iPhone, right? (Wrong.)
  • If the Wallet app displays the last five digits of the credit card number, then the rest of the number must be in there—and transmitted when the payment is made, right? (Wrong.)
  • If one loses their iPhone, someone else could extract the credit card number from it, right? (Wrong.)
  • When one makes an Apple Pay payment, Apple is able to track exactly what was bought and where, right? (Wrong.)

Apple and merchant partners have done a really good job of making the case for how easy it is to make an Apple Pay payment. What hasn't happened is communication to the customers by the banks and Apple as to why this is a preferable form of payment, probably for political and competitive reasons. And the incredible ease of use of Apple Pay has no capacity, in itself, to make a visible affirmation to the customers as to why it's more secure. That's why almost every merchant and casual customer I've talked to says, "Apple Pay? Isn't that insecure?"

The whole experience is just too simple and easy to be judged as trustworthy by many. That unexpected consequence could well be Apple's next marketing challenge.

Page 2: The Tech News Debris for the Week of June 13th.  AI Agents are cool. AI Agents could be dangerous.

Page 2 - The Tech News Debris for the Week of June 13th

AI Agents are cool. AI Agents could be dangerous.


Amazon has its Echo with Alexa. Google has "Home." So one might guess that Apple just has to compete with those products. However, Ben Bajarin argues that Apple is taking a different approach. "Why You Won't See an 'Apple Echo'."

The above essay is all about a long-standing problem. When companies that want to sell you things produce AI agents for your use, you can assume you're being manipulated. On the other hand, Apple genuinely wants to make your life better, and says so explicitly. The difference is subtle and it dictates the design of AI products. So far, I'm in Apple's camp.

For more elaboration on this theme, see the excellent: "It's Tim Cook's Apple Now: What WWDC 2016 Teaches Us About His Vision For The Company." It concludes:

This, then, is Tim Cook’s Apple; publicly moral, consumer-focused, and all-encompassing. If Cook is successful, he may even one day shake off the shadow of Steve Jobs.

As we move forward with these AI agents, every effort will be made to make them appear to be friendly and helpful. But as we've learned from free, seemingly innocent iPhone apps that track our habits and interests, people arfe remarkably susceptible to free things that look to be handy on the surface. Should there be laws about people under 18 not being allowed to engage AI agents?

One problem is that only the tech giants have enough money to do serious research on AI, Big Data, Deep Learning and so on. And they're also the ones who are the most successful at selling things. (Well, Google mostly tries.)

The SciFi dream of AI agents and robots that have no agenda will probably never be realized. It's going to be tricky to navigate all this. Just ponder the preamble on page one about Apple Pay and how consumers misjudge advanced technology.  Related to this is the next item....

Apple is in a very competitive business. Apple's opponents would dearly like to figure out what Apple is up to and beat them to the punch. Or use advance knowledge to better compete. And so, Apple cannot act like an academic institution. It can't publish papers about its research. It can't send its engineers to conferences to present and help the community advance its own state-of-the-art. Apple doesn't generally participate in working groups and standards committees where active participation there would tip Apple's hand.

This next essay demonstrates a remarkable lack of insight into how Apple works and has a starry-eyed approach to Apple and research. I present it here to remind us all that Apple is not a collection of professors who publish, share, and even compete with each other. Apple is a business, not a university. But I'll present it anyway as an example of how some people, after all these decades, still don't grok Apple. "Why Apple’s Photos announcement should offend you."

That said, Apple is indeed changing in small ways under Tim Cook. It's important that Apple reach out, listen and get involved in key standards groups, like the ITU. Everyone knows Apple will move to 4K at some point. Having representatives get involved, in some cases, gives nothing away about Apple's plans but does make Apple smarter about what where the rest of the world is headed.

Enough said on that.

Do Apple keynote presentations make you feel terrible? Inadequate? Are you bewildered by the "Apple Man" doing the demo? This amazing essay by Katie Notopoulos on Apple and its current day focus on women starts off with a hilarious rendition of the "Apple Man" which is worth reading in itself. But then it gets down to the serious business of Apple's thinking about how its products should (and do) appeal to a wide range of people, not just geeky guys. Check it out.

It's been known for centuries that music can affect the human mood. Also, some personalities and age groups are attracted to certain kinds of music for different occasions. The result has been that people know what they like and buy (or stream) music as their temperament dictates. For example, there is music that relaxes me as a writer and makes me pensive. I have a playlist called "My Workday." If a song doesn't help me think and write, it's gone.

However, it's possible to get even more scientific about the whole music business. Here's the story from Futurism. "There’s An AI That’s Making Music to Improve Your Brain Function." uses an artificial intelligence to compose music that is designed to enhance your brain's performance—decreasing anxiety, improving focus, and alleivaiting insomnia through neural entrainment.

Maybe, someday, this will replace iTunes. Let me know what you think.

Finally, you may not have heard of Apple's new subsidiary, Apple Energy. Here's the story at Forbes. "Why Apple Energy Is A Wake-Up Call For Businesses." With this company, Apple would like to obtain approval to:

...sell the renewable energy it generates to other businesses and consumers at retail prices.

Considering what Apple may have planned for an electric car, I'll leave you to ponder the implications.


AI image via Shutterstock.

Particle Debris is a generally a mix of John Martellaro's observations and opinions about a standout event or article of the week (preamble on page one) followed on page two by a discussion of articles that didn't make the TMO headlines, the technical news debris. The column is published most every Friday except for holidays.