Wednesday, August 1, 2012

Apple’s Mobile Payment Pieces are in Place

Apple acquired mobile security firm AuthenTec for $356 Million last week. AuthenTec offers a fingerprint recognition technology which works with the swipe of the screen. This will allow Apple to move forward in the mobile payment space in a big way. Apple can build an ecosystem around retail shopping the way they did with the app store. In addition this mobile payment service can ramp up very quickly using stored credit card information on iTunes. Apple can put a complete and workable mobile payment system in place for the following reasons:
  • Doing a swipe allows the shopper to make payments over the Internet (like PayPal) rather than use a tap solution (This avoids the availability issue of tap solution POS terminals)
  • Fingerprinting is going to make the shopper easy to authenticate, no pin numbers to punch in.
  • Fingerprinting is going to make the shopper feel more secure (One of the main concerns of shopper with mobile payment systems.)
  • This will be a software based solution so that it will work on all older iPhones with a software upgrade.  
This kills four birds with one stone.
In addition:
  • If this is the way people pay, then they will also likely use the Apple Wallet called Passport. 
  • Apple will gain additional payment information which will allow them to offer more targeted ads and promotions.  
Apple will not release a product unless they believe it is beneficial to iPhone users. Some of the potential advantages to shoppers include:
  • Avoiding lines if shopping for a few items and/or if users want to input store items using the phone barcode reader  
  • Storing all card information in one place 
  • Not having to carry a wallet
  • Storing coupons all in one place 
  • Getting better deals with Passport.
Apple has a history of putting together various technologies to create a service and customer experience that is a game changer, and all the pieces are in place to do this for mobile payments. However, this cannot be a Beta solution like Siri, one of the reasons they have waited patiently for the right time to roll out.

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