Apple is gearing up to roll out its mobile payments system for physical goods and services, according to a new report in the Wall Street Journal.
The paper’s sources claim that iTunes chief Eddy Cue has met with industry executives to talk about expanding the mobile payments system built around iTunes to cover buying items at retail locations.
For consumers, this means that they’d be able to pay things, or services like Uber, through their iTunes account — no more manually entering your credit card. Just enter your passcode (or tap your thumb, if you’ve got an iPhone 5s) and confirm your purchase.
For Apple, this could mean earning a sizable chunk of the nascent mobile payments sector currently controlled by the likes of PayPal, Square, and Google. As the Wall Street Journal notes, Forrester Research predicts that Americans will spend $US90 billion through their phones and tablets using these services in 2017. Even a small portion of that would be huge for Apple’s revenue.
Back in December, BI Intelligence wrote a piece explaining why Apple has all the pieces needed to become a force in mobile payments this year. Here are the 5 main reasons:
- The Apple Passbook app already allows users to access gift/loyalty cards for use at various retail and restaurant chains.
- Apple has over 600 million Apple IDs on file, most of which are linked to a credit card, according to CEO Tim Cook. This is more than both PayPal and Amazon.
- Apple’s fingerprint sensor on the new iPhone 5S provides would-be smartphone payments users with a strong security feature for ID authentication and to protect payment information.
- Apple recently introduced the iCloud keychain which stores passwords, credit cards, and all the information needed to automatically fill in billing information on desktop and mobile e-commerce platforms
- The new Bluetooth-powered iBeacon feature, available with iOS 7, could be paired with user accounts to facilitate in-store shopping, including mobile in-store payments. Over 200 million active iPhones have Apple’s iBeacon technology installed already. (BI Intelligence)
Coincidentally, in yesterday’s open letter to Apple shareholders, activist investor Carl Icahn suggested the company move into mobile payments:
As just one of many possible examples of this phenomenon, Apple could introduce a next generation payments solution. In terms of whether the marketplace is well addressed by mobile payments solutions, Tim Cook has said “I think it is in its infancy… I think it is just getting started and just of out of the starting block.” With the fingerprint sensor, iBeacon, 575+ million credit card numbers stored in iTunes, and Apple’s homogeneous iOS installed base with 79% of devices using iOS 7, we believe a revolutionary payments solution is now a very real opportunity that the company could choose to pursue.