Apple pushes deeper into mobile payments; lays groundwork to expand service for physical goods

“Apple Inc. is laying the groundwork for an expanded mobile-payments service, leveraging its growing base of iPhone and iPad users and the hundreds of millions of credit cards on file through its iTunes stores,” Douglas Macmillan and Daisuke Wakabayashi report for The Wall Street Journal.

“Eddy Cue, Apple’s iTunes and App Store chief and a key lieutenant of Chief Executive Tim Cook, has met with industry executives to discuss Apple’s interest in handling payments for physical goods and services on its devices, according to people familiar with the situation,” Macmillan and Wakabayashi report. “In another sign of the company’s interest, Apple moved Jennifer Bailey, a longtime executive who was running its online stores, into a new role to build a payment business within the technology giant, three people with knowledge of the move said. Those people said Apple also spoke to at least five other well-known executives in the payment industry about the position before tapping Ms. Bailey.”

“Forrester Research estimates that Americans will spend $90 billion through mobile payments by 2017, up from $12.8 billion in 2012,” Macmillan and Wakabayashi report. “Just this week, Stripe said it received $80 million in funding that valued the four-year-old startup at $1.75 billion. The same day, activist investor Carl Icahn called for eBay to separate PayPal, which he called ‘a gem’ of its business, into an independent company.”

“Speculation about Apple’s interest heightened earlier this month with the disclosure that Apple had applied for a patent covering payments for goods through a signal sent from a phone to a wireless receiver. The patent could indicate an interest in letting iPhone users pay for goods in stores through their phones,” Macmillan and Wakabayashi report. “Another possibility, raised by one industry executive, would be to reduce fraud by using an iPhone’s fingerprint reader before completing an online purchase.”

Read more in the full article here.

Related articles:
iWallet: Apple exploring expansion of mobile payments, sources say – January 25, 2014
Apple patent application reveals secure iWallet system with iBeacon – January 16, 2014
Apple’s revolutionary iWallet is coming – December 10, 2013
Apple could have 250 million iBeacon-capable units in the wild by 2014 – December 7, 2013
Apple turns on iBeacon to guide shoppers at 254 U.S. retail stores – December 6, 2013
Analyst: Apple to reach 600 million users with credit card accounts on file by year end – June 4, 2013


        1. Nut thinks so.

          Hey Nut, he’s JUST expressing his personal preference as he currently thinks about it. Not really something that can be argued with.

          Unlike you, he’s not declaring it’ll never happen nor that his preference is some kind of overall truth.

        2. He’s immune to the “unlike you” statement. He doesn’t understand that people might differ from him, or might have different opinions than him.

          Still, keep up the good fight brother.

      1. The difference between Target and Apple is Apple knows computers and computer security, and has a good track record despite long being a . . . Target. (sorry for the pun)

        1. Yeah, I trust Apple more than anyone, but when you have entire evil governments behind this stuff, and even our countries security and military organizations can be compromised, it seems like it’s just a matter of time.

        2. Ever since Apple released OS X, we’ve been assured that its only a matter if time before somebody creates a self replicating virus for it. After all these years, it still hasn’t happened.

          It’s not going to be just a matter of time before somebody defeats an Apple payments system either.

      2. I think companies like Barclaycard, HSBC and others also have a fair amount of credit card info and are pursued with similar interest. I don’t see why Apple should suddenly be a particular concern.

    1. I don’t understand why Apple does’ create its own credit card company. Turn that cost into a profit. Their single biggest non-productive expense is credit card fees.

  1. The key to success is simple implementation, which is what Apple do best. Universal access is another question – will Apple permit other mobile devices to interact with the system.

    iTunes is an example where Apple did allow that to happen and it jump-started the iPod revolution. Without allowing PCs to run the software and sync devices Apple would not have dominated the market and been successful in phones and tablets.

    Security is the biggest issue with mobile payments and running an app on android creates problems. However they solved that with PCs where they did not control the OS so I’m sure it can be done with android phones.

    1. “will Apple permit other mobile devices to interact with the system.”

      The “system” is the 90-billion dollar financial payment industry run by the likes of PayPal, et. al., who sees everyone as customers, including Apple.

      Apple retail needs a conduit for the purposes of taking people’s money, regardless of what brand of phone they carry.

      Apple’s iOS will allow Apple consumers to make purchases at participating stores & locations by accessing this PayPal-like system, right along with Android and Nokia users.

      I believe the answer to your question is a resounding yes. Apple will let anyone use any device authorized to perform financial transactions in their retail stores.

      I also believe a smartphone could replace the credit/debit card forever. As long as phone manufacturers are capable of implementing some sort of embedded chip that can negotiate securely with the newly modified cash registers.

      Of course, I also see a time when our cars will negotiate with the gas pump on our behalf and make payments from our accounts.

  2. While I know full well that Apple focuses on making a great solution for the customers, I can’t help but wonder if iWallet + iBeacon doesn’t equal major hurt for Amazon, and that allowing it to up the ante for companies like Amazon doesn’t bother Apple one little bit.

    1. Amazon is a great for the pajama crowd; those who hate to get dressed to go out.

      But keep in mind Amazon is a ginormous online retail outfit whose been at this for a long time and are using all the major credit cards for payment transactions. That expense has to be cutting into their already thin margins, which might explain why they’re pushing their own Amazon-branded credit card with free shipping.

      iWallet and iBeacon will have a dramatic effect on those who are in the online retail business, especially if they’re using VISA/MC’s proprietary telephony backchannel with proprietary equipment and outrageous transaction fees.

      iWallet is the digital equivalent of yesterday’s analog swipe and type and that means no more storing of your financial information in Target’s cash registers.

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