Apple Seeks Mobile Payment Service
Some enlightening news has come out lately that Apple is seeking to develop a mobile payment service similar to those by PayPal, Google, Square, Visa, Mastercard and American Express. The transition would be simple, as a solid majority of iTunes Store accounts have credit cards associated with them. A report from The Wall Street Journal claiming this notion also states that Eddy Cue has met with other companies to discuss payments in retail forms using iPhones.
Eddy Cue, Apple’s iTunes and App Store chief and a key lieutenant of Chief Executive Tim Cook, has met with technology industry executives to discuss Apple’s interest in handling payments for physical goods and services on its devices, according to people familiar with the situation.
In another sign of the company’s interest, Apple moved Jennifer Bailey, a longtime executive who was running its online stores, into a new role to build a payment business within the technology giant, three people with knowledge of the move said.
This shouldn’t really come as a surprise. Apple has already been testing iBeacon as a mobile payment method and pushed the Apple Store iOS application for years. Touch ID could also provide an additional layer of security if this payment system ever debuted to the general populace. Whatever’s about to happen, we’re excited for it, as any mobile payment system changes the way users pay for goods and could possibly change the way that traditional brick and mortar stores work.
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I would love to see this take off, get stores like Walmart, Target, and other big stores on board, and this thing will shoot off like no other.
Yes, Please.
Touch ID seems like it’d be a no brainer for a payment service.
Too late. Too late. Don’t know what all 80,000 apple employees are doing.
For what? Is there a mobile payment service that’s cornered the market?
How? Look at how many people have an iTunes account.
I have never seen one person ever use NFC on their phone to check out at a store.
It all depends on where you live.
I use it every day – though I’m not in the US.
This will be the selling feature of iOS 8 and will not be available on the 5S due to “hardware restrictions”
With a mobile payments system, you ideally want as many people to adopt it as possible. I can see Apple even moving to support Android phones (those on 4.3 or later with bluetooth 4.0) just to quickly reach that critical mass of users to incentivise outlets to adopt iBeacon in their stores.
This was the intention of Passbook. Coupons and tickets were just baby steps. Can’t wait for iOS 8!
It sounds like a boring market to revolutionize but I would welcome Apple turning banking on its head. I would be happy to deposit my money in an Apple managed account and make purchases in the real world with my iWatch and iPhone. and online on my iPad and iMac. Just in case, I’d keep cash reserves in a safe. Despite all that Apple has done, the most world changing disruption would be if Apple took on the dominance of big banks.
Unfortunately, the Big Banks will push back if they foresee Apple disrupting their “business as usual”. And many American citizens know the kind of cruel bullies the Big Banks can be.
Not if Apple takes the PayPal approach. They could compete with PayPal which big banks didn’t attempt to shut down. While PayPal has become big, it plateaued because they weren’t able to make the transition into the real world.
Then you have Square. Big banks have not destroyed Square and they’ve made a modest incursion into the real world. If Apple buys Square, it’s all over. They have millions of regular users with iTunes accounts and TouchID enabled iPhones with which to realize Square’s vision practically overnight.
Apple can continue growing before big banks feel threatened but I think they can all coexist together. There will always be people who like the security of old fashioned banking.
A good approach would be to have an e-wallet on your iPhone/iWatch for your daily spending and keep your traditional banking account for savings and investments. I’d totally be up for that.
Payment transaction processing is not the same business as credit line. The banks are in the business of credit lines and actually love PayPal and Square. The ease and proliferation of online payments increased credit utilization created a huge boon for their business. Square and PP’s market share canibalized a different market segment, the companies that were in the business of reselling credit card processing to merchants.
Apple’s not in the business of being a bank and originating credit, their entry would be a competitor to Square and PP, but wouldn’t touch any of the big banks’ core businesses.
The really interesting bit that could change the world is if electronic payment can get proliferated into developing countries to become a standard method of payment in the way credit cards are used in industrialized countries.
I couldn’t agree more. I want to bypass the banks altogether. iBank for all – who have good credit. I would hate to hear news stories of Apple foreclosing on homes and the such. It becomes complicated, doesn’t it?
For now, leapfrog the credit card industry. Charge merchants a half percent less than they pay now, and see the the world flock to the Apple payment system.
Ugh, it’s getting extremely tedious waiting to live in iMerica.
If this were to happen, I wonder if that would mean kissing goodbye all the sweet deals retailers, grocery stores, and gas stations periodically have on iTunes cards. Every now and then I can buy iTunes cards for 60 to 75 cents on the dollar., which is great for apps and Netflix subscription. But I find it doubtful retailers (say Walmart for example) would sell the cards when you could turn around and shop with it at Target. I’m sure they will limit its appeal as currency.
Hmm…I hope Eddy Cue isn’t in charge of this…he has enough on his plate right now, especially iCloud and Apple TV.
The main value in developing a payments solution is to bypass the credit card companies completely – cut out their percentages.
I wish them luck with this. In no way am I saying Apple would fail. Apple is big enough to make a good run at it. The biggest thing is getting people to accept the system they implement and trusting it.
Best part is that Apple is big enough that Paypal or some of the banks can not buy them out and just shut them down. Still a big challenge ahead for them though.
Not as easy as you’d think, and not necessarily worth it. Aside from losses, the discount rate for a merchant as large as Apple would be ridiculously small, think on the order of less than 0.1% + transaction fee (probably even less than that). Once a merchant start processing in the billions and tens of billions, their discount get ridiculously small.
Any system that maintain real monetary balance also require the provider to be a bank, otherwise it’s illegal. I don’t see Apple being in the business of becoming a bank.
End users would still have to fund their account, while it’s cheaper if you can ACH money out of their bank to fund an account, you would become a bank at that point, and that’s a whole different can of worm with regulations and liabilities. So I don’t see either of those as realistic reasons.
What’s more likely driving this is ecosystem locking. It would give Apple a huge advantage in completing a circle of services in consumer daily lives and create a much deeper locking to a single ecosystem, ensuring their market dominance for decades.
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Apple becomes a card Issuer and gets a percentage of their percentage, for not just iTunes but lots of transactions through the iPhone.
I’ve been calling this for the longest time. I hope it really is in the works.
The pieces were coming together when they launched passbook, now after they bought AuthenTec and integrated Touch ID, they’re definitely in a strong position to secure leadership in the mobile space.
There is strong competition with PayPal, Square, etc, but there isn’t really a clear leader right now, and those all require 3rd party hardware.
With iBeacon and passbook, and all the credit cards they have on file, this is a no brainer.
Paypal sucks. I’d probably trust Apple with account information. They have my blessing.
Can I get an Apple Debit card like my Google Wallet card?
How well do you want over a 3 year old hardware to be supported on the latest operating system? I seriously don’t know what makes you think that a nearly 4 year old hardware would run it’s operating system anywhere remotely close to how the latest hardware handles it, or you would be able to do on it pretty much everything you do on the latest. Technology does age too you know.