Apple has been historically slow to enter payments. Below we have highlighted some critical factors to consider regarding how this might this change in 2014.
Changing Payments Landscape.
The Wall Street Journal notes Apple will leverage iPad and iPhone via iTunes Store for mobile payments. (Jan 2014).They speculated that short term PayPal may be providing a white label edition of its payment platform to Apple.We expect Apple may deploy additional part of its payments ecosystem in 2014. The bottom line is that whatever Apple does is critical news for Retailers, Banks, Credit Card processors, Consumers, and investors.
Apple’s Payment Assets are Deep
Apple will create a payments platform to offer superior payments experience for users on mobile devices utilizing:
- Vast payment card database
- iTouch fingerprint sensor
- iCloud keychain
- Airdrop for person-to person payments
- iBeacons for retail engagement
- Passbook storage data/ vault
Identity Management is Critical for Successful Payments
In July 2012 Apple acquired Authentec a developer of identity management technology using fingerprint sensors on PC’s as well as mobile devices. iCloud keychain can store safari browser- based usernames and passwords as well as credit card details in a digital vault. Airdrop allows users to share via IOS-7 location based data that could be used for person-to- person mobile payments
Device Management plays a key role
- Apple’s iBeacons enable mobile devices to discover and communicate using BLE (Bluetooth Low Energy)
- iBeacons can support retailer payments and loyalty (coupon) marketing
- iBeacons can easily become a payment’s product marketing information channel for Apple.
Possible 2014 Apple Payments Roadmap Objectives
By leveraging Apple’s iTunes payments interface to a broader retail and consumer base, Apple will:
- Leverage Apple payments acceptance online
- Facilitate Apple payments in physical stores
- Provide a disruptive play in payments and lending
Critical: How will NFC Play in Payments Facilitation?
Apple filed a patent in January 2014 titled “Method to Send Payment Through Various Air Interfaces without Compromising User Data” in which it describes how NFC could provide user authentication in conjunction with other Wi-Fi or Bluetooth encrypted card data to facilitate payment processing and transaction authorization.
Payment Facilitation– Apple has ability to use it’s payments technology at checkout by Retailer POS (Point-of-sale) systems and for online/ mobile payments. The key will be to reduce consumer confusion by using an existing Credit Card (already on file).
Will Apple Increase or Reduce Payments Disruption?
At the heart of this process, Apple may introduce a financing system integration engine to align POS, online store checkout platforms and other user interfaces. The ecosystem for those partnerships are still being defined and may engage other than traditional credit card players. This would directly affect interchange or card transaction fees, could also reduce merchant payment costs. (Watch this SPACE!)
Device Management plays a key role
When the new iPhone 6 releases in 2014, we expect it to have additional payments functionality. Will Apple Increase or Reduce Payments Disruption.
How Will Apple’s iPhone 6 enable NFC? Consider what Apple CEO Tim Cook told investors recently:
“You can tell by looking at the demographics of our customers and the amount of commerce that goes through IOS devices versus the competition that it’s a big opportunity on the platform”
BGG Mobile is a mobile payments consulting team available to assist with mobile technologies and user engagement strategies. BGGMobile keeps watch on mobile trend, we track changes regarding mobile usage, shopping, monitization including mobile payment trends, advertising and industry engagment. Please let me know if you have any thoughts, questions, thanks for your feedback.
For more information please feel free to contact us via email at Sheila@bggmobile.com