NEW YORK (TheStreet) -- Rumors have been plentiful since the Oct. 20 launch of Apple's (AAPL) Apple Pay without Discover Card that the future of Discover Financial Services (DFS) is bleak. But new voices are speaking up that the company’s delay in joining Apple Pay may be tactically wise and that, in fact, a still better marriage offer may be on the table.
For its part, Discover has explicitly expressed a keen interest in Apple Pay. At the recently concluded Money20/20 conference in Las Vegas -- focused on emerging payments -- Discover CEO David Nelms in a keynote said, “Apple Pay is important.” He suggested that Discover would in fact join the party eventually. “We expect to be participating. We don’t know when,” said Nelms.
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Experts increasingly say that Discover’s delay is plain smart. After the euphoria that greeted Apple Pay’s launch, many consumers have been forced to confront the limited merchant base. There just are not that many places to pay with an iPhone 6.
Nelms in fact noted that. “It will take longer than people think to get merchant adoption.”
Meantime, said Matthew Goldman, CEO of credit card optimization service Wallaby, there are persistent signs that Discover is struggling with getting in sync with current technology needs. It has yet to issue EMV cards -- a.k.a. chip and PIN cards -- said Goldman. It also is widely said that Discover is lagging in creating the security tokens Apple requires of Visa (V) , MasterCard (MA) and American Express (AXP) in processing transactions.
“But Discover will get there,” said Goldman. None of these steps are daunting. It’s essentially a matter of throwing enough money and bodies at technical problems with known solutions.
Greg Garson, an associate partner who focuses on financial services with consulting firm High Start, agreed that a delayed entry into Apple Pay has few negatives for Discover. He elaborated that early embracers of Apple Pay are the ones that face the risks as the system shakes out. “From a market development standpoint, it is smart to stand back,” said Garson.