Apple Shows It Has Designs For Mobile Payments

ios 6 passbook app

Photo: Apple

During its WWDC event Apple announced a lot of new products, including the latest version of iOS, iOS 6. One of the most tantalising aspects of WWDC was the mobile payments angle. 

Apple did not directly announce a mobile payments product. It did, however, make two interesting announcements:

  • That it has over 400 million active accounts with credit cards, handily beating PayPal (110 million) and Amazon (152 million).
  • Passbook, a new app that allows people to keep their coupons and savings in one place, and even check out with them thanks to a barcode feature (see illustration). 

The implication is obvious: it’s not far from Passbook to a mobile payments app. If you can scan a barcode to get a discount, you can scan a barcode to pay with your phone. 

Apple is the only major mobile (and web…and retail…and telecom…) player who hasn’t made an overt move in mobile payments (and this still doesn’t count as overt). In particular, it’s never integrated NFC into its phones, unlike Google. 

The reason is probably that, as a user experience-focused company, Apple knows that for all the technologists’ fantasies, a new mobile payments system would have to be a lot more convenient than pulling out your card and swiping it, which is the dominant method today–and works just fine.

This is why no mobile payments solution has been able to get a critical mass–except Square, which we believe has found the right go-to market strategy in mobile payments. And Apple can’t have been indifferent to Square’s success. 

While Passbook has obvious implications for mobile advertising, since it is a repository for coupons, we believe it is also an early experiment to see if people might want to pay using their phones instead of just with their credit cards. 

A next step, aping Square further, could involve a point-of-sale application for the iPad, allowing users to have the same “magical” experience as with Square’s product “Pay with Square”, which lets you pay by just telling your name to the cashier. 

In other words, Apple is discreetly, cautiously, but noticeably, dipping its toes into mobile payments. 

MORE: Our in-depth look at Square and the mobile payments opportunity →

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