Sunday, August 31, 2014

As Apple Approaches the Mobile Payments Market

  • Last week, several media sources reported that Apple would introduce mobile payment services when it launches the iPhone 6 on September 9. The device could support near-field communication (NFC), which supports payment transactions by passing the device near registers that support NFC.
  • In recent years, Apple’s U.S. Patent and Trademark Office filings have included many areas within payments and consumer purchasing, including an iWallet.
  • Note: Nokia introduced the first phone to support NFC in 2006, and firms such as SamsungSony and LG Electronics have provided NFC support for several years. To date, the technology has had positive momentum in EuropeChina and Japan, but has been less successful in the U.S. 
MY TAKE
  • Success in the mobile payment market will likely requires solutions that are secure, user-friendly, and interact with varied transaction networks.
  • If Apple does introduce a payment service on September 9, it will leverage a 1) a broad portfolio of patents, 2) over 800 million iTunes users and 3) its tight integration of hardware and software. Competition will likely drive innovation from players including AmazonGooglePayPalSquareAlibabaTen-cent, mobile telecom providers and Bitcoin and digital currency offerings.
  • The battle for market share will likely be protracted with advantage driven by: 1) providing a solid customer experience, 2) leveraging a preexisting customer base and 3) supporting a diverse set of technology platforms. 

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