The iPhone 6 announcement produced more than a million tweets and if you Google “Apple Pay,” you'll get an incredible 300 million hits.

For those interested in being able to more easily and safely pay for goods and services with our gadgets, Apple Pay has done more to get the ball rolling than any of its predecessors. But, as cool and innovative as it is, Apple Pay is only part of the story.

The most obvious fact that is seldom mentioned in the media's feeding frenzy over Apple and Apple Pay is that iOS users are actually still a minority. Granted, they are an attractive minority with their high net income, education levels and device usage.

However, according to IDC, Android powered devices control 80% of the market worldwide, while iOS represents a mere 15%. In the U.S., the race is a bit tighter with Android at 52% and iOS at 42%. The iPhone 6 may have converted a few Android users, but even so, Apple Pay only works for less than half the consumers in the U.S.

Once financial institutions sober up from the Apple Pay high, they will need to face the question of what they will do to enable digital payments for Android users that want to use their smartphones to purchase goods and services. They will realize, through the haze of the Apple-colored hangover, that they cannot ignore them in the payments area any more than they can ignore them in the digital banking landscape.

Any bank or credit union worth their salt has a digital banking app that is compatible for both Android and iOS users. The question is will financial institutions decide to take the initiative to provide for an Apple Pay-type option for their Android users or will they wait for the next tech company, for example, Samsung, to step in with the answer and take away more of the day-to-day interaction with the consumer.

Perhaps they will. After all, it is difficult for banks and credit unions to innovate quickly. Many obviously feel it is better to give up significant aspects of their business in order to stay in step with technology juggernauts such as Apple. That is why some in the media have suggested that some tech companies should consider entering the banking business.

Why bother negotiating with these slow, risk-adverse, legacy-laden institutions at all? School them in innovation and then show them how to deliver it in services and products that people want their banks and credit unions to provide.

That, unfortunately, isn't going to happen. The cost and complexity of running a bank is not compatible with the fundamental business model of tech companies. Meeting the capital requirements, operating in a highly-regulated environment and living with the overhead associated with running a financial institution are not conducive to high growth and the attractive stock multiples that tech companies enjoy.

Banks and credit unions know this. They do not feel threatened by things like Apple Pay because they know Apple is not interested in taking away their core business. Maybe that is why so many have a mindset similar to Alfred E. Neuman, the fictitious mascot and cover boy of Mad magazine when it comes to the Apple Pay model: “What – me worry?”

However, worry they should. By deploying Apple Pay and getting financial institutions to give up basis points and their primacy in the payments relationship with their customers, Apple has laid the foundation for successfully extracting value from the infrastructure of the financial institutions. Do this enough times – with a Samsung version of Apple Pay – and the core business of banks and credit unions is essentially commoditized.

Rather than attacking banks and credit unions head on by becoming financial institutions, third parties such as Apple are using technology to take advantage of their hosts by taking profitable bits of the business and using it to fuel their own growth models such as with payments.

Kevin Kammer is CEO of Prairie Cloudware. He can be reached at 402-504-1201 or kevin@prairiecloudware.com.

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