Android is facing stiff competition from a carrier owned ISIS and Sprint’s new mobile payment system. Google Wallet also has problems regarding its work on a new flagship. This seems like a perfect opportunity for Apple to launch a mobile payment system and take the sweet spot at the top.
Research suggests that mobile transactions will rise to up to 600 billion dollars a year by 2016, a growth of over three hundred percent from 2012. Apple should get into the race before it becomes too late. Microsoft has also stated that it has plans to introduce a mobile payment system that has the ability to store mobile payment and credit card information. While the Apple iOS 6 does have a payment service at the moment, it does not offer the same functionalities as the other software. This Passbook service was released in June 2012 with the ability to store tickets, loyalty cards and coupons. However, since it cannot connect your debit and credit cards, you cannot make any mobile payments through this service.
This less-than-practical service is a result of a clash between the Apple engineers who wanted to create a proper payment service, and the executives who decided that they should proceed slowly. According to Phil Schiller, the Apple head of Marketing, they are not looking to fight for a piece of the pie. This is not unlike Apple, whose methodology involves waiting for others to enter a new market before swooping in. This is probably their biggest motive behind taking a backseat for the moment. Apple would have a great advantage in this field, if they decide to join it. Over 200 million iPhones have been sold, and iTunes has the credit card information of over 400 million users. Plans of mobile payments have been in the pipeline for months now.
The biggest question is whether the new software should be linked to the Apple iPhone or should a new network be built? Other options involve Apple acting as a bank, making direct payments to merchants or teaming up with a financial institution. The Head of Apple’s software, Scott Forstall has suggested a new app that can store payment methods to help the user decide which card he needs to use for a particular transaction. Apple’s own NFC technology had severe flaws, such as a negative reaction from retailers and a heavy toll on the phone’s battery life. Still, any headway made within the next three years should really benefit the company. The mobile payment industry requires a leader and Apple has all the necessary qualities to take the lead in this area.