Apple’s Payment Platform: A Thought Experiment

Apple Payment PatentSupposedly, Apple has about 600M iTunes accounts linked with credit cards already. They would be fools not to pursue a payments solution, especially with their fancy fingerprint authentication. Here’s the story I imagine playing out:

 

• Phase 1/iOS8: Pay-only accounts for iphoners and iwatchers to purchase at brick-and-mortar stores utilizing bluetooth, NFC, or some other tech  – cards are already linked, so there is little-to-zero work required on the part of their customers (except to upgrade to the new device). It’ll be tied to iBeacon, but this may not be widely adopted, yet, as they’ll be asking merchants to change behavior. Maybe they throw in fingerprint-authenticated in-app purchases as an added benefit. I bet they even offer an Apple-designed phone case to carry your ID so you can leave your wallet at home and get used to the idea of using just your phone.

 

• Phase 2/iOS9: Full accounts with withdrawal to bank and maybe a POS for vendors – obviously leveraging iBeacon, probably all tied to Siri. As an iphoner, I’m already addicted to Phase 1, so the hassle of setting up a bank account will seem like a logical next step for the “magical” new features. As a merchant, after the initial hassle of inputing my inventory, I really don’t change behavior much – just scan barcodes with my iPad camera, or tap the item on the screen. Maybe I just say the name of the item while Siri is listening “1 12-pack of donuts, 1 12-pack of donut holes, and 1 Elmers glue, Siri.”

 

• Phase 3/iOS9.1: Leverage all this data for better advertising, setting up digital merchant stores, etc. They build a marketplace to stomp out Square and compete with eBay and Amazon. Slap a shopping app on an iTV. You can now use Siri to shop for goods directly through your OS, no browser needed. Google will hate this.

 

• Phase 4/iOS10: Once trust is built, push through regulation to electronically store a drivers license or ID. Maybe use retina-scanning tech (the NSA will be THRILLED) with a fancy new 83-gigapixel camera to verify the ID holder’s authenticity. </physical wallet>

 

Google and Microsoft will follow suit.

 

Being a PayPal employee, I’m having fun identifying ways to reinvent payments and forecasting the competition’s moves. I have a few ideas to combat the utility an Apple or Google can provide, but I expect a fierce battle.

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