According to a report from The Wall Street Journal, Apple is actively working on an expanded payment service that will allow customers to purchase physical goods or services using their iPhone or iPad. Eddy Cue, in charge of the iTunes Store, has been reportedly meeting with industry executives regarding a potential move to allow retail stores to accept payment using their iPhone. Apple’s iTunes Store is host to 575 million customers, most of which have active credit cards tied to their accounts. Apple lets customers purchase software, movies and music using their iTunes accounts. This would be a significant move, expanding purchase options beyond the iTunes Store.
The introduction of Passbook in iOS 6 was Apple’s first foray into payments, but these were typically accounts that were set-up outside of iTunes. For example, you can pay for goods at Starbucks using Passbook, but that account is tied to your Starbucks account. It’s that account which has your credit card information and handles the processing. Apple’s part is to bring up the bar code when in range of your favorite coffee shop, making it easy to complete your transaction. This process is easy once setup, but the inconsistencies between those companies which support Passbook has seen little in the way of adoption.
It has been long rumored that new iPhones would include NFC, which competiting Android phones have used to support Google Wallet. Today’s report doesn’t mean anything new on that front. Apple could choose to build mobile payment support in through Passbook. Retailers could also setup in-store support for iBeacons, similar to what Apple has rolled out in their stores. Using iBeacons, the Apple Store can identify you as a customer, allowing for faster pickups of merchandise ordered online. As the WSJ points out, a recent patent was discovered that allowed payments of goods through a signal sent from a phone to wireless receiver. If Apple is serious about expanding mobile payment options, it’s likely that software supported on legacy devices would drive the program. However, Apple could limit the program to devices that support TouchID, touting the security of the on-board fingerprint scanner, which can only be used by authorized parties.
Depending upon the size and scope of such a program, it might offer a compelling reason for users to upgrade to newer phones. While smartphone payments have yet to take-off, it’s likely due to the lack of support and clumsy process. As mentioned earlier, payments at Starbucks using Passbook are fast and easy. If Apple were able to expand upon this concept and gain support of major retailers, it could change how people think about making transactions.
Multiple sources have said Jennifer Bailey, who heads up their online stores, has accepted a new role building a payment business.
The market is ripe for mobile payments using your smartphone. Apple’s huge customer base, iBeacons technology and software expertise presents a unique opportunity.
How would you like to pay? Cash, Credit or iPhone?