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Apple's Only Dipping A Toe Into Mobile Payments, But It Could Make A Splash

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Apple (NSDQ: AAPL) has yet to give a line on where it sees NFC in its future product and service roadmaps, but that doesn’t mean the company has ignored the issue of mobile payments, or decided to leave it entirely to third parties like Square to use its devices to enable the payments via other routes. Last week’s upgrade of the Apple Store app could be its boldest indication yet about where it sees a role for mobile payments in the future.

Companies already invested in NFC are further extending the ways that a consumer can use the wave-and-pay technology. Today it got a boost when Intel (NSDQ: INTC) and MasterCard announced they would be offering an NFC authentication option for payments made on Ultrabooks.

And Verifone, the payment services provider that has worked with Google (NSDQ: GOOG) on its Google Wallet venture, acquired European rival Point for €600 million ($811 million) to expand the number of locations where it can offer its NFC-based payment services.

But while other companies like Google and the Isis consortium develop commercial deployments of NFC-based mobile payment services, Apple is making its first forays into mobile payments on its own terms.

As part of its upgrade to the Apple Store app, Apple introduced a new service called EasyPay. The service itself is simple enough: it lets a user photograph a barcode and then look up information about the product based on that barcode. It then lets a user charge that product to his iTunes account.

EasyPay is still a very limited service: it is currently only working in the U.S. and only works for in-store purchases of “select accessories” sold in Apple’s own retail operation. That does not even include the purchase of big-ticket items like computers or phones. And according to this article in the New York Times, doesn’t look like it will add them in the future.

And Apple is not the first to offer mobile barcode scanning. Among them, companies like Neomedia have been offering mobile barcode scanning technology for years now; and the Chinese e-commerce company Alibaba last July launched Alipay, a barcode-based mobile commerce service that is now available across China via an iPhone, Android or Symbian app.

But the idea of linking up such a service to a customer’s iTunes account is what gives this service real potential: in June Apple said that it had 225 million iTunes accounts, a number it has reached with steady growth rate during the past several years, notes the analyst Horace Dediu.

To be clear, Apple has not indicated that it would take this service beyond its own stores, just as it has never taken iTunes out of its own platform to make it a more universal payment system, so it remains to be seen whether it chooses to go this route.

But this is perhaps the first example of how Apple’s payments system and database can be used outside of its app store and the iTunes store, which could work with other technologies like NFC, or whatever becomes the standard for mobile payments.

And if Android handset makers, Nokia (NYSE: NOK) and the rest continue to push into ways of enabling mobile payments, Apple will likely do something to keep up with the Joneses, if not move past them.

2 Responses to “Apple's Only Dipping A Toe Into Mobile Payments, But It Could Make A Splash”

  1. Todd Klein

    I have been using CSI globalVCard app to make all of my mobile
    payments. It’s the safest and most secure way for my business to make mobile
    payments on the go. The app is available on android, blackberry and itunes. Any
    of my employees with a tablet or smartphone can use it too! 

  2. Tim Meyer

     “Today it got a boost when Intel (NSDQ: INTC) and MasterCard announced they would be offering an NFC authentication option for payments made on Ultrabooks.”
    So you are supposed to lift your Ultrabook out of its bag and wave it at the terminal? Smacks of desparation.