Apple will become a trillion-dollar company based not on iPads and Apple TV, but payments.
Imagine taking out your iPhone and instead of buying Angry Birds you bought the latest Groupon.
Or one-click bought the latest object d’art at OneKingsLane or Fab on your iPad seconds after downloading and launching their app.
Or you took out the awesome Hotel Tonight and without ever having signed up for the service you booked a room — and paid for it without typing in your credit card number.
Who has 100M credit cards?
Right now those purchases are uber-painful on a mobile phone. You have to create an account, enter your address and enter your credit card info.
Buying apps is easy and we do it all day long–on iOS at least — because our credit card number is already in the device.
iOS is like being part of a university club: we know who you are when you walked in and, yes, we have your billing information. No need to show your ID and — gasp! — don’t ever take out money in the club to pay your bills! So uncouth, are you a heathen dear sir?
Buying on Amazon is easy and we do it all month long — because our credit card number is already stored.
Sensing a pattern here?
The person with hundreds of millions of stored credit cards wins big. There are only two people on the planet who have stored over a hundred million active credit card numbers that I can think of: Apple and Amazon.
One is in commerce and one isn’t — yet.
Imagine if app developers could accept payments from Apple users and bill their already-stored credit cards. How much would it be worth to remove the signup friction?
3%? In a heartbeat!
5%? Painful, but I’ll do it.
7%? You bastards, but I’ll still do it.
10% You’re killing me Apple, but my product has a 30% margin so frack it.
If you’re selling commodity products like flatscreen TVs, you’ll break at the 3% mark, but if it’s hotel rooms, flash sales or deals, well, you’ll take it on the chin all the way to the 10% mark.
And if you don’t, someone else will.