Will Apple become a payment “powerhouse” after Sept. 9? Apple has more than 800 million users’ card details in its database, and it is natural to wonder when Apple will capitalize on this payment-industry potential. Apple does have a crucial advantage in mobile payments. With hundreds of thousands of credit cards already stored in iTunes, it should be relatively simple to find a seamless way to move the same payment credentials into a mobile wallet. For such initiatives, Apple has been filing numerous patents over the past several years, but some prominent ones hint that Apple is the next big payments power:
- 2010: Patent applications were filed with a focus on acquiring payment information on a handheld device. The patent cites a method for conducting a group transaction having a plurality of group transaction members on a handheld electronic device. It further mentions a method for authorizing a payment in a peer-to-peer transaction and conducting a wireless transaction.
- April 2010: Patent citing the “iTravel” app, which would handle a broad array of functions to assist with travel logistics, such as collecting ticket information or doing easy airport check-ins. The app can leverage NFC at check-in and other travel booths hosting NFC scanners and also enable cloud-based mobile payments for ticketing.
- 2011: Apple filed a patent in Q2 2011 regarding its Passbook, an application in iOS that enables users to store coupons, boarding passes, tickets (including concert tickets), store cards and other forms of mobile payment. This could ultimately enable the storing of monetary values in the app for redemption at checkouts.
- Jan. 31, 2013: Apple was issued a patent citing crowd-sourced, peer-to-peer mobile banking that could use iTunes to provide cash on demand. The patent outlines a system whereby a user would post requests for small amounts of cash using their iPhone, and nearby users could respond to provide some quick funds when there’s no ATM nearby.
- May 2, 2013: Patent citing Apple’s future e-commerce app dubbed Shopping. The patent cites the prospect of adding NFC to the Shopping app for extensive retail use. The POS at retail outlets can swiftly process customer orders using the device’s NFC.
- May 16, 2013: Extensive patent related to the Shopping app citing claims for turn-by-turn directions, a user rating system, NFC compatibility, online purchasing and a list of retailer icons. Such features take the end-to-end payment ecosystem from product search to final purchase.
- Sept. 26, 2013: Converting a digital-media item from a rental to a purchase. Today Apple allows consumers to buy songs off an album. If a user starts buying more tracks from a particular album, at some point he might decide to buy the entire album. Apple discounts the price by how many tracks the user previously bought from the album so that he doesn’t get double billed. In the future, if you really liked a movie you just rented, you'll be given the option of buying the movie at a price that discounts the rental fee.
- Dec. 12, 2013: A small patent application provides embodiments and presents a detailed path Apple will take in retail payments. The patent application directly covers a unique system whereby a user of an iOS device could be presented not only with local restaurant options but also the actual wait times and seating availability in real time. The patent goes on to explain remote and in-restaurant ordering systems that enable customers and wait staff to place and modify orders. Finally, there is a payment option that would allow for pre- or post-payments of the order.
- Jan. 30, 2014: The USPTO published a major patent application from Apple that reveals a new financial-systems integration system. Apple's invention relates to financing integration with an e-commerce marketplace, and more specifically, the present technology relates to a financing-systems integration system that enables customers to shop and checkout using a loan ID. The patent filing illustrates that Apple is investigating the whole financial matrix and not just the electronic-wallet side of the equation.
- July 31, 2014: In this patent application, Apple cites improved techniques and systems for redeeming a promotional code to acquire a digital product, such as an in-application asset. The techniques and systems can operate to validate the promotional code that is being redeemed to acquire the in-application asset and can confirm that a requestor’s redemption device has the corresponding application program installed.
Wallet Service Related
- 2009: The US Patent & Trademark Office (USPTO) awarded the company a major patent grant that covers the intricacies of the iWallet. This invention is supported by 23 patent claims and dates back to the first quarter of 2009 – indicating just how important it must have been to Apple. The intricacies were put forward by the credited investors: Brandon Casey, Gary Wipfler and Erik Cressal.
- Aug. 28, 2012: Patent related to Apple’s future iWallet. This revealed Apple’s virtual equivalent of a credit card. The app features a GUI representing the swipe nature of a credit card. The card information is digitally represented through an embedded electronic wallet. The iWallet can be used at the point-of-sale for finalizing payments after transferring card data.
- April 4, 2013: A new iWallet patent covering a method for conducting a financial transaction. It cites a method for conducting a financial transaction by taking a picture of a first code displayed on a transaction terminal using a camera on a portable electronic device and sending data from the device to the transaction terminal to conduct the transaction. The transaction terminal uses a near-field communication channel or another wireless communication channel, or both, wherein the data is derived from the first code to enable the transaction terminal to verify that the portable electronic device is physically located near the transaction terminal.
- Jan. 16, 2014: Patent revealing a secure iWallet system to include new air interfaces, including iBeacon. Along with NFC, iBeacon becomes effective add-on for syncing with differently configured points of sale. For instance, if the POS is not NFC compatible, iBeacon can come into the picture for a Bluetooth sync. It talks about a commercial transaction method using the concepts of NFC secure element, Bluetooth, Wi-Fi and others.
- Oct. 16, 2010: Patent citing the use of the magnetometer or the compass capabilities of devices for pairing. This will enable two devices in close proximity to identify each other using the magnetic signature and pair-up. This could be a prominent value-add to enable proximity-based marketing with further payment enablement.
- May 2, 2013: Patent citing the establishment of an NFC session. This revealed Apple’s aim to advance its NFC project, which began in 2008. This demonstrates the possibility of adding NFC features to apps such as the iWallet, iTravel and Shopping.
- Sept. 7, 2013: A patent filing details an incredible fingerprint scanner with advanced integrated NFC circuitry that will deliver unique features. Apple says the control circuitry within the electronic device may operate the device in multiple modes. When operated in a sensor mode, the sensor circuitry may use the conductive structure to gather fingerprint data or other sensor data.
- May 22, 2014: Apple filed another NFC-related patent, hinting that we can expect exclusive circuitry for NFC in the next iPhone. The patent states that different antenna structures may be formed at opposing ends of an electronic device. The combining of circuitry may allow NFC and non-NFC circuitry to be coupled to common antenna structures.
- Feb. 20, 2014: The USPTO published a patent application from Apple that reveals newly advanced facial- and feature-recognition methods of combining multiple image detectors to obtain robust feature detection. Apple’s previous work in this area covered advancing the accuracy of facial recognition and how facial recognition could one day apply to making payments.
- April 17, 2014: In another patent-application filing published by the USPTO , Apple revealed the next level of the passcode-authentication process for iDevices that involves a color-coded combination feature covering “password gestures.” The new method is designed to both strengthen the current authentication process using Touch ID and to provide an alternative method of authentication.
- July 3, 2014: The USPTO published a patent application from Apple that reveals a new dual-factor authentication system for Apple’s iTunes Store and beyond. The new system will introduce two key elements to the authorization process that will make it extremely difficult for unauthorized users to make a purchase on someone else’s account. Technically, Apple will be adding a third factor, by asking questions about the user’s purchase history.
- July 31, 2014: The USPTO published a patent application from Apple that reveals new security-control features for Apple’s future iWallet application. The new security system will work with an iPhone and Apple’s iTunes Store on a Mac. The controls will enable parents to set boundaries for spending and track all purchases. Apple’s patent also introduces us to the digital-wallet-processing engine.
Rumors are ripe, some of them could come out to be true...
“Apple mobile payments could be Passbook on steroids,” said Pacific Crest analyst Josh Beck. “Apple could use its large stockpile of iTunes accounts and cards on file [about 800 million], along with Passbook and a new token partnership with Visa, to provide a highly scalable payments platform.”