We’ve all been waiting with bated breath for Apple to take the mobile payment industry by storm and bring it to the mass consumer market. For years, there have been whispers that Apple is working on its own approach to reinventing mobile payments, including the possibility of a NFC-equipped iPhone. When Apple unveiled Passbook in iOS 6 last month, the company announced its first real foray into mobile payments by partnering with select companies for handling virtual goods like coupons and airline tickets.
According to a new report on The Wall Street Journal, Apple’s Passbook is only a shadow of things to come. The company is “deliberately” working on its own mobile payment system, and while the rest of its competitors scramble to test the waters, Apple is sitting back and developing the right strategy.
Congressional testimony raises concerns about consumer protections for mobile payments
Are mobile payments safe? That was a question that the House Financial Services Subcommittee on Financial Institutions and Consumer Credit posed to various finance officials earlier today. The subcommittee didn’t get a particularly clear answer.
According to written testimony provided by Stephanie Martin, associate general counsel for the Federal Reserve Board of Governors, defining what protections apply to mobile payment systems is complicated by the fact that many businesses involved in the transfer of money through mobile devices aren’t banks. Companies involved in mobile payment systems that don’t meet the established definition of providing banking services aren’t subject to certain scrutiny, regulation, or consumer protection laws.
The mobile payment options becoming mainstream are the simplest and low-tech ones.
Read enough articles about NFC and its potential for mobile payments and you’ll find yourself thinking the technology is the inevitable mobile payment platform. Every major mobile platform except iOS already includes or will include support for NFC-enabled devices. There are lots of partnerships being announced between key players like device manufacturers, carriers, and banking or credit card companies. It also just seems to make sense that this is the future.
Until you look up from all the stories about what NFC and look at what’s really happening in the world. You don’t see much evidence of NFC payment systems in everyday life. NFC isn’t yet emerging into mainstream commerce, but there is ample evidence that mobile payments are taking off without it. Those options becoming mainstream are decidedly low tech by comparison, but that’s precisely why they’re succeeding.
There’s been a lot of talk over the past year or so about mobile payment systems and the concept of an iWallet. One of the challenges to any digital wallet concept is that it needs several components, most of which are provided by different companies and governed by different regulations. At a minimum, those components need to include on-device hardware, a mobile app or OS that can manage the transaction, a banking or credit card system that actually transfers money from your account to a retailer, support by major POS and cash register systems, and some mechanism for your phone to securely check-in with your selected account(s) to ensure money is available for purchases.
That’s a tall order and a lot of cooperation is needed when you have a different company providing each of those required functions. One way to simplify the process is to have one company deliver all or most of those functions on its own. There are few companies in the world that can pull all those capabilities together. One of them is Apple.
It looks like Square has yet another competitor in the mobile payments arena. Global payment leader VeriFone has announced SAIL, a credit card reader much like Square’s, that will attach to a number of mobile devices. While VeriFone may have a little catching up to do, they have the advantage of an extensive network with a commanding percentage of retail transactions passing through their service.
NFC isn’t a new technology. Android and BlackBerry phones with NFC capabilities have been available for a while now and various companies have started looking at implementing NFC as a mobile payment or digital wallet solution. Google Wallet being the most well-known while MasterCard’s new PayPass Wallet Services, which the company announced on Monday is the newest and potentially broadest in scope
Apple, however, hasn’t shown much interest in adding NFC to the iPhone. The lack of NFC hasn’t kept mobile payment options off the iPhone – as we’ve recently reported T.G.I. Fridays and Tabbedout, Boston’s light rail commuter service, and AmTrak have all moved to offer mobile payments using the Starbucks app/virtual card model.
A new deal between Apple and location-based deals startup Pirq, to offer daily food and drink deals to the company’s employees in silicon valley could be a sign of Apple testing the waters with both a deals network and whether such ecommerce options make sense for iPhone users.
Tabbedout makes mobile payments from iPhones mainstream
This week featured a handful of announcements relating to using your iPhone as a virtual wallet including news of Boston’s smartphone-based commuter rail payment system and CVS integrating its loyalty card system into its iPhone app.
Capping the week is news that restaurant chain T.G.I. Fridays announcement that more than of its franchises in the U.S. will begin offering patrons the ability to settle their restaurant or bar tab using an app. The move comes as part of partnership with startup Tabbedout – a mobile payment company that aims to bring iPhone (and Android phone) payments into the mainstream with a focus on bars and restaurants.
Stick-on NFC chips could prove the need for NFC support in iOS
There have been a handful of technologies touted over the past few years that would remove (or dramatically reduce) the need to carry our credit/debit cards, loyalty cards, and even cash. For the past couple of years, NFC has been the technology of choice for turning our phones into digital wallets. Google and RIM have built NFC support into their respective mobile OSes and a handful of manufacturers have built NFC phones, but the technology hasn’t lived up to the hype.
Paypal has finally made it into the mobile payment market after being beat to the punch by the likes of Square and Intuit. PayPal may be late to the party but they have a more recognizable name in the world of payment systems and that may just be enough to push them to the front of the line. Besides their name, they’re also offering merchants a 2.7% flat rate on transactions versus the 2.75% offered by Square. PayPal didn’t stop there either, launching a full on geometrical attack by choosing a triangle as the shape of choice for their card reader dongle.
BARCELONA, MOBILE WORLD CONGRESS 2012 — What if you could swipe your credit card and then — moments later — have the transaction details appear on your phone. Better still, what if all of your payments could be organized in a beautiful app, an app which could actually make managing your money fun. This service now exists for your iPhone, and it’s called Boku.
![Apple Plans To Invade The Mobile Payment Industry One Step At A Time [Report]](http://cdn.cultofmac.com/wp-content/plugins/lazy-load/images/1x1.trans.gif)
![Apple Plans To Invade The Mobile Payment Industry One Step At A Time [Report]](http://cdn.cultofmac.com/wp-content/uploads/2012/07/IMG_4888.jpg "IMG_4888")
![Boku: Control Your Credit Card With Your iPhone [MWC2012]](http://cdn.cultofmac.com/wp-content/uploads/2012/02/boku.jpg "boku")
