APPLE PAY - Innovation Research
(Class: Innovation, Fall 2020)
Client: Apple Pay
This research report analyzes the innovation of contactless payments while using Apple Pay as a case study through various research methods.
Diffusion Research:
For this diffusion research, I decided to focus on the perspective of the customers of merchants who provide the platform to better understand user need's of this product. Certain key findings this research report brings are: the main concerns of adoption between different generations, the consequences of the innovation, and the several implications to why people adopt certain innovations. The results and conclusions derive from various research methods.
The diffusion research I focused on was Rate of Innovation, Consequences of Innovation. To explore these focuses I used several research methods:
▪️5 why’s
▪️Phone interviews
▪️Observations
▪️“Try it yourself”
During the first phase of my research, I focused on interviewing members of Generation Z, between the ages of 16 and 22, and of both genders. For the second phase of the research, I focused on members of older generations between the ages of 42 and 54. They were all asked a series of questions about Apple Pay, if they used it, why they used it, at what time did they adopt the product, and the pros and cons of the product. During both phases I also conducted research methods to explore the product myself, such as observation and Try it Yourself to explore the consequences of the innovation.
Initial Hypothesis:
Early adopters for this product would most likely be from Gen Z, since they are the ones who are most adapted to technology and attached to their phone nowadays. After analyzing the results from the research I realized that my research insights challenge my initial hypothesis, because there are so many deviations in the process of diffusion.
Rate of Adoption:
One of the things that was very interesting to learn about was that Apple Pay has a very specific target market, which is Generation Z, and there are some gaps in the market that are yet to be fulfilled. This is mainly what causes the rate of adoption of the innovation. For example, the laggards, who are usually people of older generations, I understood that Apple Pay was not useful or practical for them, and people who are not very comfortable with technology, prefer to stay with the traditional way of doing things. However, from the first research I realized that Gen Z, or the early adopters and early majority, saw it as something very exciting, very useful, and very easy to use.
In conclusion, Apple Pay is innovative for Gen Z, the innovators, because Apple Pay is a platform which is conforming to the society and technology we have nowadays. It is fair to say that only the people who have already conformed to today’s technology and are up to date, will be the innovators of this product.
Consequences of Innovation:
From my own research, I also understood that there are several consequences to the innovation. After reading Kevin Kelly’s article on “What Technology Wants,” I realized that innovations usually come from subsystems. One innovation is built on another. Evolution itself is evolving, and the ability to evolve is also evolving. For this reason, people who are not as comfortable with technology, which is the subsystem of Apple Pay, will most likely not adopt the innovation. Similarly, Apple Pay is very convenient for certain people, but because there has been a delay for companies to adopt the system, so do costumers. The main issue with Apple Pay is that because certain places have not adopted accepting Apple Pay payments, they still have to carry their wallet, so they can’t experience the benefits of Apple Pay to its fullest potential.
Another consequence of the innovation that I got from the research is that there are certain people who prefer carrying their wallets because they also have to carry their ID and other important cards with them. When I conducted the “Try it Yourself” research method, I also realized various consequences of the product:
1. It did not show me the full receipt of my order, it only showed the total amount spent.
2. It still printed out the receipt, which is ironic for the product because it is trying to be sustainable by wasting less paper.
3. It only works with Apple devices.
Main Insights:
▪️Because of Covid-19, contactless payments have become thepreferred way of paying.
▪️Certain people prefer carrying their wallets because they also have to carry their ID and other important cards with them.
▪️Does not show the full receipt of order, it only shows the totalamount spent.
▪️It still printed out the receipt
▪️Only works with Apple devices
▪️People want faster ways of paying
Apple Pay Legacy Map
LEGACY MAP:
The evolution of contactless payment began with a text based messaging service. It was then followed by a series of mobile apps that achieved the same result but more efficiently. Finally, the service began to incorporate NFC payment systems to facilitate direct transactions. Although Apple Pay and other contactless payment options are now more widely accepted, people have yet to fully adopt these payment alternatives. Physical payments are actually less convenient than contactless ones, so it begs the question why aren't more people making the switch? Unfortunately, there seems to be a widespread lack of familiarity with the service. Older generations that are already apprehensive about technology are difficult to educate (due to their limited exposure) and middle aged actors may not see a real reason to drop the already advanced debit/credit card system (which now also incorporates RFID technology). Gen Z and Millennials however, are being educated with curriculums centered around technology. This will make these generations suitable subjects for contactless payments and provide much of the growth for this service in the future. Additionally, all future generations willlikely grow in tech dependence allowing for a tech savvy environment ripe for contactlesspayments.
▪️Future generations will likely grow in tech dependence allowing for a tech savvy environment ripe for contactless payments.
▪️Contactless payments have gone from keychains, to text messages, to a phone tap.
▪️Since Covid-19, contactless payments have become the preferred way of paying.
