January 28, 2014
Apple is reportedly looking into ways to expand into a mobile-payments service that would go beyond the iTunes store. Down the line, it might compete directly with the likes of Google, eBay’s PayPal and Square, which have become ubiquitous in mobile payment processing for physical goods and services. For Apple, that would likely mean consumers would be able to use their iPhones or iPads to make in-store and online purchases with greater ease.
Denee Carrington, an analyst at Forrester Research, told The Wall Street Journal that Apple is “absolutely the sleeping giant” in terms of payments. “If Apple is in the game, it certainly changes the space and would make merchants think differently about who to partner with,” she said.
WSJ reports that Apple executives Eddy Cue and Tim Cook have met with industry executives to discuss the company’s interest in handling payments and that one longtime exec, Jennifer Bailey, was transitioned into a new role of building a payment business within the company.
The article calls Apple’s potential in the payments world “enormous,” citing the 575 million registered users with iTunes and iPhone sales of 375 million over the past five years. Right now, users can only purchase music, books, movies and apps through the iTunes store. Users must manually type in credit card information or use an app like PayPal to buy something from their phones.
But if those 575 million iTunes users’ credit card information was stored and easily accessible for making purchases, it would be a gamechanger.
“Apple could offer iPhone users the option to fill in credit-card information automatically based on a card already registered with iTunes,” WSJ suggests. “Another possibility, raised by one industry executive, would be to reduce fraud by using an iPhone’s fingerprint reader before completing an online purchase.”