Apple Laying Groundwork For Mobile Payment Service

By Anna Rose Welch, Editorial & Community Director, Advancing RNA

Company looking to expand payment services, turn customer iPhones, iPads into credit, debit cards

Apple could be poised to take mobile payments by storm in the future, the Wall Street Journal reported last week. According to the Journal, Apple is currently gearing up to build a mobile platform that would turn customers’ iPhones or iPads into credit or debit cards and would make the tech giant a huge rival for PayPal, Google, and Square.

While Apple’s plans and mobile strategy are currently unclear, the company seems pretty serious about laying down the groundwork. Not only has its iTunes and App Store chief, Eddy Cue, been meeting with executives to discuss Apple’s potential for handling mobile payments, but the company also interviewed several well-known executives in the mobile payment industry as potential job candidates to plan the new mobile payment business. The company finally promoted Jennifer Bailey, its executive in charge of online stores, to this new position, where she will be responsible for developing the company’s mobile payment initiative.

Increasing Retail Sale Through Mobile Payment

The outreach Apple could have with mobile payments would be enormous, considering the company had 575 million registered iTunes store users last year. Over the past five years, it has sold around 375 million iPhones and roughly 155 million iPads since the tablet launched in 2010. As Forrester Research analyst Denee Carrington told the Journal, “Apple is absolutely the sleeping giant in the payments world. They have the capability; they just haven’t tied it all together.”

Indeed, the company already enables customers to purchase apps, music, and movies through the iTunes store. Even customers who have downloaded an app through the iTunes store can purchase digital goods through that app using an iTunes account. Its Passbook feature also serves as a prime example of its potential. Through Passbook, customers can store various event tickets, loyalty cards, and coupons, not to mention, it is an accepted payment method in Dunkin’ Donuts and Starbucks stores. With the exception of certain goods in Apple stores, though, customers are currently unable to purchase other non-digital retail goods or services using an iTunes account.

However, experts are saying that Apple has some pretty big pieces of the mobile payment puzzle already covered, including fingerprint scanners for heightened security and iBeacon technology that can sense a customer’s current location. Also, in a patent that was recently published, Apple would be able to use iBeacon technology as a secure way to send wireless mobile payments. All of these capabilities suggest that Apple could become a large competitor in the mobile payment realm.

Of course, how Apple will choose to enter this realm is still undefined. According to Mashable, the company could choose to go several ways: it could allow customers to purchase non-digital goods in online stores using iTunes account credentials. It could also enable customers to use iTunes accounts as a payment method for items in bricks-and-mortar stores. Or, Apple might choose the mobile wallet route. Regardless of method, the company’s already massive customer base makes it a pretty impressive candidate in the mobile payment business.

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