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Old Jul 6, 2012, 05:22 PM   #1
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Apple Deliberately Holding Back on Mobile Payment System




The Wall Street Journal profiles Apple's "go-slow" approach to mobile payments. In June, Apple announced the inclusion of a feature called Passbook to iOS 6. Passbook allows users to keep loyalty cards, tickets and coupons in one central app. Passbook, however, does not offer a full payment system which has been a rumored area of research for Apple.



The Wall Street Journal reveals that this is a very deliberate decision from Apple:
Quote:
Holding back in mobile payments was a deliberate strategy, the result of deep discussion last year. Some Apple engineers argued for a more-aggressive approach that would integrate payments more directly.

But Apple executives chose the go-slow approach for now. An Apple spokeswoman declined to comment on the decision-making process. Apple's head of world-wide marketing, Phil Schiller, in an interview last month, said that digital-wallet mobile-payment services are "all fighting over their piece of the pie, and we aren't doing that."
According to the Wall Street Journal's sources, a small group within Apple was reported to have been investigating a new service that would embed payment methods into the iPhone or even build a new payment network. Discussions reportedly included Apple facilitating payments with merchants and even all the way to the possibility of Apple to begin acting as a bank. Apple also considered simpler wallet app possibilities or working with existing middlemen and taking a small cut of each transaction.

Meanwhile, the Apple iPhone team had indeed explored NFC communications options in the next iPhone. Various concerns included impact on battery life, security, vendor adoption and customer satisfaction.

Ultimately, Passbook is said to be the current compromise while Apple presumably waits to see how the mobile payment market matures.

Article Link: Apple Deliberately Holding Back on Mobile Payment System
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Old Jul 6, 2012, 05:23 PM   #2
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So much for being an innovative company...
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Old Jul 6, 2012, 05:25 PM   #3
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they need to keep a list of things to entice others to buy the latest iphone

nfc coming in iphone 7
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Old Jul 6, 2012, 05:25 PM   #4
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Hopefully this means that whatever they're working on will be really good. I'm all for getting rid of the wallet.
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Old Jul 6, 2012, 05:26 PM   #5
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Quote:
Originally Posted by MultiMediaWill View Post
So much for being an innovative company...
Because doing what other companies do is totally innovative.

Anyways, I'm fine with this approach as I got an iPhone 4S. If Apple wants to wait a generation to include NFC and just include some new software in iOS 6, well, that's great for me


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Hopefully this means that whatever they're working on will be really good. I'm all for getting rid of the wallet.
I wanted to refute this, but I honestly can't think of any way of doing so... therefore, I must concede you are correct and join with you in celebrating the decline of wallets.
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Old Jul 6, 2012, 05:26 PM   #6
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Old Jul 6, 2012, 05:27 PM   #7
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Old Jul 6, 2012, 05:27 PM   #8
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Seeing as Google are already pushing Mobile Payments, and Microsoft are going to start pushing them with Windows Phone 8, Apple may want to see how others do it, so they can do something that will set them apart.
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Old Jul 6, 2012, 05:29 PM   #9
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I don't think they're not trying to be innovative... it's just that everyone's trying to do their own thing and to jump into such a balkanized market isn't in the best interest of Apple and their customers. Why try to start a NFC and have no stores try to adopt it because they already tried Google Wallet, or whatever?
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Old Jul 6, 2012, 05:29 PM   #10
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I'm actually glad to hear this. I want the next iPhone but am not yet comfortable with NFC technology. I'm sure there'd be an option to turn it off, but even so I'm a bit relieved they're not plunging in until more details have been ironed out.
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Old Jul 6, 2012, 05:30 PM   #11
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John Gruber had some convincing podcast discussion of why he thinks Passbook may be a glimpse of a really big deal, a future plan that Apple is slowly and strategically building up:

http://muleradio.net/thetalkshow/6/

“Innovation” doesn’t automatically mean rushing ahead into the latest buzzword, succeed or fail. Apple’s style of innovation is more focused on doing a thing right than doing it rushed.

P.S. I have utterly no use for Passbook now. But if, SOME day, I can choose to no longer have a wallet, or even house keys (NFC!) I think I’ll appreciate that. Or even if I carry one “backup” ID card of some kind in case of hardware failure. Lugging my current stack of cards and cash and keys seems like something the future might not need....
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Old Jul 6, 2012, 05:33 PM   #12
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Originally Posted by MultiMediaWill View Post
So much for being an innovative company...
Sometimes choosing to NOT do something is just as innovative as doing something. Apple isn't about shoving as many features into their phone as they can. They're about making a great experience - and that includes not adopting a technology that's barely used.
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Old Jul 6, 2012, 05:36 PM   #13
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Quote:
Originally Posted by nagromme View Post
John Gruber had some convincing podcast discussion of why he thinks Passbook may be a glimpse of a really big deal, a future plan that Apple is slowly and strategically building up:

http://muleradio.net/thetalkshow/6/

“Innovation” doesn’t automatically mean rushing ahead into the latest buzzword, succeed or fail. Apple’s style of innovation is more focused on doing a thing right than doing it rushed.

P.S. I have utterly no use for Passbook now. But if, SOME day, I can choose to no longer have a wallet, or even house keys (NFC!) I think I’ll appreciate that. Or even if I carry one “backup” ID card of some kind in case of hardware failure. Lugging my current stack of cards and cash and keys seems like something the future might not need....
This is the future. I hate having to carry change and notes and cards around with me. It's so unnecessary. Not to mention it is easily lost; the only problem is will ID cards become a part of this new system? Would suck if not.
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Old Jul 6, 2012, 05:37 PM   #14
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NFC payments, only on the iPhone 5S
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Old Jul 6, 2012, 05:39 PM   #15
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I suspect that the passbook app can be very easily converted into a fully fledged NFC payment app just by the inclusion of any number of mastercard/visa/paypal/itunes-credit add ons, accompanied by a new iphone that contains an NFC chip. Such features won't be announced until the new phone is announced, of course. But Apple is building the critical mass for the passbook app now.
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Old Jul 6, 2012, 05:44 PM   #16
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I suspect that the passbook app can be very easily converted into a fully fledged NFC payment app just by the inclusion of any number of mastercard/visa/paypal/itunes-credit add ons, accompanied by a new iphone that contains an NFC chip. Such features won't be announced until the new phone is announced, of course. But Apple is building the critical mass for the passbook app now.
Exactly. This whole article seems like marketing-speak, so they can say the new iPhone has NFC and everyone will seem so shocked...
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Old Jul 6, 2012, 05:45 PM   #17
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Cool guys never show up at the party first!! I guess we can call it fashionably late!!

Seriously though Apple is definitely cooking up something that's gonna be amazing. It won't be NFC but I bet they'll create something entirely new and get everyone from the big retail chains,restaurants,gas stations etc.... to go on board ala Siri with the car makers!!
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Old Jul 6, 2012, 05:50 PM   #18
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I'm hoping they do include NFC, because if Apple does it, it's sure to see a much quicker adoption rate and implementation here in the U.S. and other countries that don't yet have it widely used. If they don't make a push for it, it certainly could be a while before anything happens.
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Old Jul 6, 2012, 05:52 PM   #19
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It would not surprise me in the least, if Apple became involved as an integral part of the payment system. They've got legions of believers that trust them more than they trust other entities.

Apple would get a cut, just like the credit card companies do now, and it would result in one more massive income stream for them.

Perfect for Apple, nothing but money, money, money, money, money... well you get the idea.

I will admit, that at the present moment, it seems that there's no stopping them. The great majority of moves they make, turn to gold. I never expected this level of success from one single company. It's just incredible.

However, if this does come true, I will stop buying iPhones and immediately give the ones I have away. It was fun while it lasted, but I prefer choices and variety. Being hooked into an MPS by Apple is out of the question.

I'll keep using their computers as long as they suite me, but that's where I draw the line.

Having them act like a banker, financial institution, or however you want to categorize it, is of no interest to me. A large percentage of my transactions are cash. I have zero credit card balances, and I am not about to enroll in another system.
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Old Jul 6, 2012, 05:52 PM   #20
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I'm actually glad to hear this. I want the next iPhone but am not yet comfortable with NFC technology. I'm sure there'd be an option to turn it off, but even so I'm a bit relieved they're not plunging in until more details have been ironed out.
^^^THIS^^^

While NFC is really cool and might be the way things are done in the future, people (even the most tech savvy) have too many questions regarding security, how it works etc. Some times, even when we have the tech, people are not always ready to jump in. This is a touchy subject for a lot of people and can't be forced on them because it effects their finances. It's a completely different way of doing things. I'm STILL getting used to using my phone for boarding pass barcodes or remembering to use my Starbucks app instead of buying gift cards (these are just habits). I think what they're doing is smart. Take small steps to get other payment methods (gift cards etc.) on the phone so that people get used to it and comfortable with the idea, then move on to credit and debit once it's the next logical step. They're training their customers for the future and I find that absolutely brilliant.
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Old Jul 6, 2012, 05:53 PM   #21
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Originally Posted by MultiMediaWill View Post
So much for being an innovative company...
yeah cause every business out there has full support for NFC etc running in all countries and its all completely secure and reliable so why shouldn't Apple be pushing this tech.

----------

Quote:
Originally Posted by Benjy91 View Post
Seeing as Google are already pushing Mobile Payments, and Microsoft are going to start pushing them with Windows Phone 8, Apple may want to see how others do it, so they can do something that will set them apart.
More like they may want to see what issues come up so they can fix those problems before their users have them.
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Old Jul 6, 2012, 05:56 PM   #22
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Honestly, I don't see this as a great play. Just like the 7 inch tablet rumors, Apple is risking arriving late to the party and having to work to get penetration, instead of being a frontrunner. I know, they have a huge user base, but that is eroding with the maturing of Android and the coming out of WP8. If they're not careful, they could lose users. For me, the iPhone has driven me into the Apple ecosystem more than anything else. If they lose iPhone customers, they lose the halo effect of the iPhone as well.

I currently have a iPhone 4S, but have been looking sideways at some Android/WP8 handsets for a little while now, for various reasons. One of them has been NFC functionality. I had the Nexus S 4G, and Google Wallet was very convenient to use, especially when it was combined with some of the loyalty cards as well. The marketplace may be a little slow to adopt, but technology is sound and proven. The possibility of a larger screen and NFC for the iPhone 5 has kept me in the iOS camp for my phone so far. Slipping on these issues may push me towards the HTC EVO, the GS III, or the next Nexus.
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Old Jul 6, 2012, 05:57 PM   #23
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This is HIGHLY disappointing. Japan and other nations have been using NFC systems for a long time; vending machines, pay stations/check-outs, airlines - all used through NFC tech. If Apple is simply using an app that requires a barcode to be scanned as currently implemented this would be disappointing (many companies do not own the proper scanners).

Again, holding back on tech already available on other devices in order to "work out" the system (i.e. "how much money can we make off this from the banks and stores?")
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Old Jul 6, 2012, 06:03 PM   #24
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I'm confused by some of the comments here. The article says they are moving slowly into mobile payments. It says the team is working with NFC and considering issues about battery life, etc. It says nothing one way or the other about whether the next iPhone will include NFC.

I'd bet that it will, but this article doesn't really clue us in one way or the other. Maybe it makes it less likely, as there's some indication that Apple is skeptical of the technology.
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Old Jul 6, 2012, 06:03 PM   #25
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I'm actually glad to hear this. I want the next iPhone but am not yet comfortable with NFC technology. I'm sure there'd be an option to turn it off, but even so I'm a bit relieved they're not plunging in until more details have been ironed out.
The problem isn't the technology, security or even Apple. The real issue is that most of the industrialized world has yet to agree on a standard for NFC payments.

The Japanese and South Koreans have been using NFC contactless payment enabled cellphones since about 2005. There are no horror stories coming out of southeast Asia, so presumably they have implemented security correctly.

RFID and NFC payment systems have been around for quite a while here in the United States, but they are pretty limited. Most of the major public transit systems in large metropolitan areas have NFC rider cards. Here in the SF Bay Area, it's the Clipper Card which covers eight transit agencies. Additionally, there is FasTrak which is a statewide toll payment system; here in the Bay Area it mostly covers bridge tolls, however there are some express lane tolls it covers, both here in the SF Bay Area as well as Southern California.

Many credit card terminals in retail stores are also enabled for NFC contactless payments. Chase issues both Visa and Mastercard credit cards with PayPass NFC technology. Although no one uses it though.

It would be wonderful if my next phone could be used as a transit pass, it would remove one card from my wallet. That's actually how the "osaifu keitai" (literally "wallet phone") became popular in Japan; it acted as a Mobile Suica card for JR East, the biggest rail operator in metropolitan Tokyo.

Any hesitation by Americans about such a system is unfamiliarity or ignorance, not a problem with the technology which has been heavily used in a consumer environment for many years.

Quote:
Originally Posted by bedifferent View Post
This is HIGHLY disappointing. Japan and other nations have been using NFC systems for a long time; vending machines, pay stations/check-outs, airlines - all used through NFC tech. If Apple is simply using an app that requires a barcode to be scanned as currently implemented this would be disappointing (many companies do not own the proper scanners).

Again, holding back on tech already available on other devices in order to "work out" the system (i.e. "how much money can we make off this from the banks and stores?")
Again, the problem lies with the lack of multi-national standard. American Express has recently removed NFC chips from their Blue credit card. My old one had the chip, the one recently issued does not.

In Japan, basically NTT DoCoMo said, "here is our system, end of discussion." Most readers here aren't really familiar with NTT DoCoMo, but they are *the* dominant mobile operator and were pretty close to being a monopoly for many years.

I should be pointed out that using the iPhone has a scannable electronic pass is not new. Several US-based airlines offer mobile boarding passes (I used this on American Airlines a couple of weeks ago).

This is an example of when typical competition between corporations actually does not help the consumer. We are years behind the Japanese (who introduced the wallet-phone in 2005) because dozens of companies are working on their own systems to hopefully grab a larger piece of the pie. Meanwhile, there is virtually no adoption since no merchant wants to invest heavily in a losing horse.

Undoubtedly American Express has invested millions in their now-dead NFC technology as well as their previous smart-chip card technology (I had one of those USB Blue Readers -- it provided zero benefits to me).

Last edited by cvaldes; Jul 6, 2012 at 06:16 PM.
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