September 1, 2014
The iPhone is to be launched in a week from now and speculations and rumours are piling up day by day regarding Apple’s move towards payments. The rumours cite that Apple is looking at partnerships with payment companies before it actually launches its new payments plan.
1) Re/code had reported that Apple has reached an agreement with american express
2) Noted industry analyst Tim Bajarin had proposed an interesting concept around iWatch based payments citing Disney’s Magic Band as a use case. With rumors of Apple opting for NFC, Bajarin’s theory is inclined more towards NFC in iWatch. The ‘tap-to-pay’ functionality in an NFC enabled iWatch could really make it a killer in the mobile payments space. The analyst also cited that user authentication could be done via the iPhone synchronized with iWatch.
3) There have been claims that iPhone 6 would be using NFC chips from the Dutch chipmaker NXP. Some recent leaked pictures of claimed iPhone parts reveal the possibility of NFC hardware. It is also being reported that Apple has been working with NXP on contactless mobile payment, possibly targeting users’ iTunes accounts.
4) Bloomberg has recently reported that Apple is partnering with major payment networks Visa and MasterCard. There are claims that Apple is looking forward to turning the new iPhone into a mobile wallet.
What is being expected out of the new iPhone is an easier mobile payment process with the inclusion of NFC chip. With the fingerprint technology as an add-on, users can make payments seamlessly with the touch of a finger. Customers might also be able to present their phones at checkout counters of partner retailers. There is no clear info whether Apple has partnered with retailers as well.
Recently Pacific Crest Securities had mentioned in a report that Visa and Apple could announce a mobile payment partnership in the near future. It is believed that Visa’s new token service would be fuelling this partnership. The token service replaces 16 digit numbers of plastic cards into a numeric substitute that can stored directly on mobiles. The report also highlighted the popular fact about Apple’s 800 million payment cards on file. Pacific Crest believes that Apple’s Passbook app and Visa’s token service could provide a highly scalable payments platform.
There is no in-depth information as to what would be the nature of the agreement between Apple and the payment processors. But it can be said that Apple would also have to frame partnerships with retailers and banks as well in order to truly create a comprehensive payment experience. There is also the issue that there are still many retailers that lack POS systems which enable NFC payments.
There hasn’t been wide acceptance of mobile wallets from a consortium of providers. This still gives Apple a shot at making the concept work. Apple’s own Passbook app can help in achieving those key partnerships that it might require in the future. Apple’s Passbook has helped it foray into the following sectors:
Stay tuned with us to gain more insights as the iPhone launch approaches. The Money Event and Let’s Talk Payments would be the perfect platform for a big coverage. The event hosts speakers from Visa, MasterCard and american express