Mobile payments are fast becoming standard. Chaotic Moon's Ben McCraw shares his experiences on how to make this platform work for your company.

1. PAYMENT
////////////// FEBRUARY 2015 //// A CHAOTIC MOON STUDIOS PUBLICATION //////////////

2. CHAOS THEORY February 20152
ONCE THE
APPLE WATCH
IS IN MARKET,
YOU WON’T
EVEN HAVE
TO PULL YOUR
PHONE OUT TO
BUY THAT CUP
OF COFFEE,
YOU’LL JUST
TOUCH YOUR
WRIST AND GO.
ARLY IN MY CAREER AT CHAOTIC MOON
IN 2012 AND 2013, I ARCHITECTED AND
DESIGNED THE ANDROID VERSION OF THE
STARBUCKS MOBILE PAYMENT APP. STARBUCKS
WAS ONE OF THE FIRST RESTAURANTS TO ADOPT
MOBILE PAY, AND IS STILL AMONG THE MOST POP-
ULAR. THE APP HANDLES UP TO SEVEN MILLION
TRANSACTIONS EVERY WEEK.
The way we designed it, in the exciting early days
of mobile pay, you had to pre-fill your Starbucks
account with money through your debit/credit card
and could then use that balance to make in-store
purchases. Starbucks loved the pre-pay system
because they were making money whether any
goods or services were provided or not. They are
lucky enough to have a large cult following that is
willing and able to pay the price.
As Starbucks CEO Howard Schultz was recently
quoted as saying, “someday soon there will be no
more ‘mobile commerce,’ it will just be commerce.”
Mobile pay was a $204 billion market in 2014 and is
estimated to rise to a more than $600 billion market
by 2018. Because of that, brick-and-mortar retailers
and tech giants are in a historic, high-stakes battle
for consumers’ wallets.
Right now there are three major players in the
fight. Google Wallet has its strengths but, like many
Google products, a rush to market limits their
success. The real battle is between Apple Pay and
CurrentC, an app spearheaded by Wal-Mart but
cosponsored by many other corporations includ-
ing Best Buy, Target, 7-11, and Southwest Airlines,
who together represent nearly a trillion dollars
in yearly business. These major corporations are
actively rejecting Apple Pay, which will, I predict,
end up being a big mistake for them. CurrentC
works off the Starbucks model that I helped design
in 2012. But unlike Starbucks, most of the compa-
nies behind the app aren’t selling an addictive drug.
Also, there are basic technological reasons that
limit CurrentC’s value offering. Unlike Apple Pay,
CurrentC is a prepaid system where the user loads
the mobile app with cash, either directly or by link-
ing to a checking or savings account, working only
with prepaid store cards linked directly to your bank
account. It’s core offering is centered around retail-
ers trying to get rid of credit-card fees rather than
actually supplying convenience to their customers.
With CurrentC, you have to unlock your phone,
open an app, point your phone at a scanner, and
wait. Apple Pay, on the other hand, is strictly touch-
and-go, using the NFC chip in the smart-phone.
Apple Pay is currently restricted to Apple products,
although it will eventually be added to Android
platforms. Once the Apple Watch is in market, you
won’t even have to pull your phone out to buy that
cup of coffee, you’ll just touch your wrist and go. No
cash, no paper receipts, no problem.
Additionally, Apple is apparently assuming the
liability for fraudulent purchases, though there will
be much less fraud than in CurrentC, considering
Apple Pay is much more secure. More tellingly,
all major U.S. banks and the big three credit card
companies have signed on with Apple Pay and have
reportedly agreed to pay Apple 15 cents per trans-
action in exchange for the better security offered
by the Apple Pay solution. “I think without a doubt,
Apple has a unique place in the mobile ecosystem,
with hardware, software, and services,” say James
Anderson, Senior Vice President of Emerging
Payments at MasterCard, told PC World magazine
last year.
MOBILE PAY
WAS A $204
BILLION
MARKET IN
2014 AND IS
ESTIMATED
TO RISE TO A
MORE THAN
$600 BILLION
MARKET BY
2018.
By Ben McCraw
CCO
Chaotic Moon Studios
MOBILE
PAYMENT
MELEE
“SOMEDAY SOON THERE
WILL BE NO MORE ‘MOBILE
COMMERCE,’ IT WILL JUST
BE COMMERCE.”
Howard Schultz
CEO
Starbucks
E

3. It should be clear that NFC is the future of mobile
payment and QR codes are quickly becoming a thing
of the past. So you’d think that CurrentC would be
dead before it starts. But it will be able to skirt by for
a while on the old paradigm, pressing its advantage
in collective offers and rewards program, kind of
like frequent-flier miles for mobile pay. Customers
have an obvious attraction to discounts and deals,
but the technological barriers will kill CurrentC
sooner rather than later.
In the end, it’s about convenience. Consumers
want a single method of payment, not a piece-
meal approach based on where they happen to be
shopping that day. Through intelligently designed
hardware/software integration Apple has dominated
music, movies, books, the PC, and mobile com-
munications, and are now working on enterprise,
wearable, and e-commerce POS. There’s no ques-
tion in my mind Apple is the future of mobile pay,
not some cheap Best Buy incentives program.
Ed Catmull writes in Creativity, Inc. that “The
future is not a destination – it is a direction.” Apple is
building that future and retailers can decide whether
they want to be part of it or wrestle for second place.
“THE FUTURE IS NOT A
DESTINATION – IT IS A
DIRECTION.”
Ed Catmull
PRESIDENT
Pixar Animation Studios
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