Will Apple Dominate Mobile Payments in 2014?

By Sheila BaconChief Mobile/Digital StrategistApril 2014

Apple: Historically Slow to enter Payments

How might this change in 2014? Wall Street Journal notes Apple will leverage

iPad and iPhone via iTunes Store for mobile payments. (Jan 2014)

Short term PayPal may be providing a white label edition of its payment platform to Apple

Apple may deploy additional part of its payments ecosystem in 2014

Whatever Apple does is critical news for Retailers, Banks and Consumers

Apple’s Payment Assets are Deep Apple will create a payments platform to

offer superior payments experience for users on mobile devices utilizing: Vast payment card database iTouch fingerprint sensor iCloud keychain Airdrop for person-to person payments iBeacons for retail engagement Passbook storage data/ vault

Identity Management is Critical for Successful Payments

In July 2012 Apple acquired AuthenTec a developer of identity management technology using fingerprint sensors on PC’s as well as mobile devices.

iCloud keychain can store safari browser-based usernames and passwords as well as credit card details in a digital vault.

Airdrop allows users to share via IOS-7 location based data that could be used for person-to-person mobile payments

Device Management plays a key role Apple’s iBeacons enable mobile devices

to discover and communicate using BLE (Bluetooth Low Energy)

iBeacons can support retailer payments and loyalty (coupon) marketing

iBeacons can easily become a payment’s product marketing information channel for Apple.

Possible 2014 Apple Payments RoadmapBy leveraging Apple’s iTunes payments interface to a broader retail and consumer base, Apple will:

1. Leverage Apple payments acceptance online

2. Facilitate Apple payments in physical stores

3. Provide a disruptive play in payments and lending

Critical: How will NFC Play in the Payments Facilitation? Apple filed a patent in January 2014

titled “Method to Send Payment Through Various Air Interfaces without Compromising User Data” in which it describes how NFC could provide user authentication in conjunction with other Wi-Fi or Bluetooth encrypted card data to facilitate payment processing and transaction authorization.

Payment Facilitation Apple has ability to use it’s payments

technology at checkout by Retailer POS (Point-of-sale) systems and for online/mobile payments. The key will be to reduce consumer confusion by using an existing Credit Card (already on file).

Will Apple Increase or Reduce Payments Disruption? At the heart of this process, Apple may

introduce a financing system integration engine to align POS, online store checkout platforms and other user interfaces. The eco-system for those partnerships are still being defined and may engage other than traditional credit card players. This would directly affect interchange or card transaction fees, could also reduce merchant payment costs. (Watch this SPACE!)

Device Management plays a key role

Will Apple’s iPhone 6 enable NFC? CEO Tim Cook told investors recently:

“You can tell by looking at the demographics of our customers and the amount of commerce that goes through IOS devices versus the competition that it’s a big opportunity on the platform”

When the new iPhone 6 releases in 2014, we expect it to have additional payments functionality.

Additional Information BGG Mobile is a mobile payments

consulting team available to assist with mobile technologies and user engagement strategies.

For more information please feel free to contact us via email at Sheila@bggmobile.com

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