Everything is pointing to mobile payments as the next frontier that Apple will conquer with the introduction of the next iPhone. They have been awarded several patents for mobile commerce and rumors from suppliers support the idea that they will adding a NFC chip to the next iPhone. Here are the reasons I think this will be a massive game changer for mobile and social commerce:
- Apple already has 160 million credit cards on file for iTunes, they will set up a system somewhat like PayPal where transactions are directly debited for your checking account to pass over the 2-5% fee charged by the credit card providers.
- Retailers hate the current credit card providers, ask any small business or restaurant what they hate most and this will be at the top of the list. If Apple delivers a simple, transparent, user friendly system – watch out American Express and MasterCard, hello iBank.
- NFC is not new technology, it has been used in Japan, South Korea and throughout Europe for a long time, the payments are often collected by the phone service providers (you better believe Apple will cut them out of this). It is used for subway and bus passes over here, etc. Apple wil come to the table with a simple system that will empower even Mom to link up her iPhone to her bank account.
- I think the possibilites this business will spawn are seemingly endless. They could push to replace all of the frequent shopper cards stacked in your wallet or purse with a simple loyalty system across all of your purchases. This would allow them to set up something similar to dunnhumby.
There will a huge amount of competion for this space from the current card providers, upstarts like Jack Dorsey’s Square , Facebook and their Points currency, and Google. How will it all shake out is anyone’s guess. I would probably place my early bet on Apple for two reasons – the iPhone is wildly popular and the device most ready to make it a good experience and Apple’s ability to take existing technology and bundle it into a seamless user friendly experience.