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Old Jan 24, 2014, 07:00 PM   #1
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Apple Looking to Develop Mobile Payment Service




Apple is looking to develop a new mobile payment service on the back of its hundreds of millions of iTunes Store accounts, most of which have credit cards already attached, according to The Wall Street Journal.

The report claims Eddy Cue, Apple's senior vice president in charge of Internet Software and Services -- including the iTunes Store -- has met with other companies to discuss the company's desire to handle payments in retail stores and elsewhere.
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Eddy Cue, Apple's iTunes and App Store chief and a key lieutenant of Chief Executive Tim Cook, has met with technology industry executives to discuss Apple's interest in handling payments for physical goods and services on its devices, according to people familiar with the situation.

In another sign of the company's interest, Apple moved Jennifer Bailey, a longtime executive who was running its online stores, into a new role to build a payment business within the technology giant, three people with knowledge of the move said.
Apple has been driving new payment technologies in its own retail stores, including the use of Bluetooth-based iBeacons and the ability to pay for smaller purchases through its Apple Store iPhone app, without the need to interact with a salesperson.

At the moment, Apple only allows accountholders to use their stored credit card information for purchases on Apple's online and retail stores through its app as well as the iTunes and App Stores. The new Touch ID technology could speed up and authenticate purchases if Apple were to integrate that with its mobile payment service.

Tim Cook said last October that Apple would use its skills in building software, hardware, and services to create "great products" in categories that Apple does not participate in today. Passbook, the system that Apple released a few years ago to make it more convenient for customers using gift card or ticketing apps -- along with Touch ID, iBeacon, and its vast collection of saved credit card numbers -- could all be part of a larger mobile payments play by the company.

Mobile payments is a burgeoning industry, one that Tim Cook called "in its infancy" last year, with many players. Ebay's PayPal, Google, Square, Visa, Mastercard and American Express are all examining -- or have already developed -- mobile payment platforms.

Article Link: Apple Looking to Develop Mobile Payment Service
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Old Jan 24, 2014, 07:01 PM   #2
dontwalkhand
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I would love to see this take off, get stores like Walmart, Target, and other big stores on board, and this thing will shoot off like no other.
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Old Jan 24, 2014, 07:02 PM   #3
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Yes, Please.
Touch ID seems like it'd be a no brainer for a payment service.
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Old Jan 24, 2014, 07:02 PM   #4
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Too late. Too late. Don't know what all 80,000 apple employees are doing.
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Old Jan 24, 2014, 07:02 PM   #5
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This will be the selling feature of iOS 8 and will not be available on the 5S due to "hardware restrictions"
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Old Jan 24, 2014, 07:03 PM   #6
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Too late. Too late.
For what? Is there a mobile payment service that's cornered the market?
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Old Jan 24, 2014, 07:13 PM   #7
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This was the intention of Passbook. Coupons and tickets were just baby steps. Can't wait for iOS 8!
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Old Jan 24, 2014, 07:21 PM   #8
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It sounds like a boring market to revolutionize but I would welcome Apple turning banking on its head. I would be happy to deposit my money in an Apple managed account and make purchases in the real world with my iWatch and iPhone. and online on my iPad and iMac. Just in case, I'd keep cash reserves in a safe. Despite all that Apple has done, the most world changing disruption would be if Apple took on the dominance of big banks.
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Old Jan 24, 2014, 07:25 PM   #9
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Ugh, it's getting extremely tedious waiting to live in iMerica.

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Old Jan 24, 2014, 07:28 PM   #10
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Originally Posted by ipedro View Post
It sounds like a boring market to revolutionize but I would welcome Apple turning banking on its head. I would be happy to deposit my money in an Apple managed account and make purchases in the real world with my iWatch and iPhone. and online on my iPad and iMac. Just in case, I'd keep cash reserves in a safe. Despite all that Apple has done, the most world changing disruption would be if Apple took on the dominance of big banks.
Unfortunately, the Big Banks will push back if they foresee Apple disrupting their "business as usual". And many American citizens know the kind of cruel bullies the Big Banks can be.
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Old Jan 24, 2014, 07:29 PM   #11
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Too late. Too late. Don't know what all 80,000 apple employees are doing.
How? Look at how many people have an iTunes account.
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Old Jan 24, 2014, 07:31 PM   #12
tasset
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If this were to happen, I wonder if that would mean kissing goodbye all the sweet deals retailers, grocery stores, and gas stations periodically have on iTunes cards. Every now and then I can buy iTunes cards for 60 to 75 cents on the dollar., which is great for apps and Netflix subscription. But I find it doubtful retailers (say Walmart for example) would sell the cards when you could turn around and shop with it at Target. I'm sure they will limit its appeal as currency.
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Old Jan 24, 2014, 07:33 PM   #13
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Hmm...I hope Eddy Cue isn't in charge of this...he has enough on his plate right now, especially iCloud and Apple TV.
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Old Jan 24, 2014, 07:34 PM   #14
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Unfortunately, the Big Banks will push back if they foresee Apple disrupting their "business as usual". And many American citizens know the kind of cruel bullies the Big Banks can be.
Not if Apple takes the PayPal approach. They could compete with PayPal which big banks didn't attempt to shut down. While PayPal has become big, it plateaued because they weren't able to make the transition into the real world.

Then you have Square. Big banks have not destroyed Square and they've made a modest incursion into the real world. If Apple buys Square, it's all over. They have millions of regular users with iTunes accounts and TouchID enabled iPhones with which to realize Square's vision practically overnight.

Apple can continue growing before big banks feel threatened but I think they can all coexist together. There will always be people who like the security of old fashioned banking.

A good approach would be to have an e-wallet on your iPhone/iWatch for your daily spending and keep your traditional banking account for savings and investments. I'd totally be up for that.
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Last edited by ipedro; Jan 24, 2014 at 07:40 PM.
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Old Jan 24, 2014, 07:39 PM   #15
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The main value in developing a payments solution is to bypass the credit card companies completely - cut out their percentages.
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Old Jan 24, 2014, 07:44 PM   #16
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Originally Posted by ipedro View Post
Not if Apple takes the PayPal approach. They could compete with PayPal which big banks didn't attempt to shut down. While PayPal has become big, it plateaued because they weren't able to make the transition into the real world.

Then you have Square. Big banks have not destroyed Square and they've made a modest incursion into the real world. If Apple buys Square, it's all over. They have millions of regular users with iTunes accounts and TouchID enabled iPhones.

Apple can continue growing before big banks feel threatened but I think they can all coexist together. There will always be people who like the security of old fashioned banking.
Payment transaction processing is not the same business as credit line. The banks are in the business of credit lines and actually love PayPal and Square. The ease and proliferation of online payments increased credit utilization created a huge boon for their business. Square and PP's market share canibalized a different market segment, the companies that were in the business of reselling credit card processing to merchants.

Apple's not in the business of being a bank and originating credit, their entry would be a competitor to Square and PP, but wouldn't touch any of the big banks' core businesses.

The really interesting bit that could change the world is if electronic payment can get proliferated into developing countries to become a standard method of payment in the way credit cards are used in industrialized countries.
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Old Jan 24, 2014, 07:45 PM   #17
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Originally Posted by ipedro View Post
It sounds like a boring market to revolutionize but I would welcome Apple turning banking on its head. I would be happy to deposit my money in an Apple managed account and make purchases in the real world with my iWatch and iPhone. and online on my iPad and iMac. Just in case, I'd keep cash reserves in a safe. Despite all that Apple has done, the most world changing disruption would be if Apple took on the dominance of big banks.
I couldn't agree more. I want to bypass the banks altogether. iBank for all - who have good credit. I would hate to hear news stories of Apple foreclosing on homes and the such. It becomes complicated, doesn't it?

For now, leapfrog the credit card industry. Charge merchants a half percent less than they pay now, and see the the world flock to the Apple payment system.
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Old Jan 24, 2014, 07:49 PM   #18
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I couldn't agree more. I want to bypass the banks altogether. iBank for all - who have good credit. I would hate to hear news stories of Apple foreclosing on homes and the such. It becomes complicated, doesn't it?

For now, leapfrog the credit card industry. Charge merchants a half percent less than they pay now, and see the the world flock to the Apple payment system.
That's why Apple should buy up Square. They can keep the brand as an arm's length company. Apple's brand doesn't fit with banking so Square could be the face for that facet of the company.
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Old Jan 24, 2014, 07:51 PM   #19
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I wish them luck with this. In no way am I saying Apple would fail. Apple is big enough to make a good run at it. The biggest thing is getting people to accept the system they implement and trusting it.

Best part is that Apple is big enough that Paypal or some of the banks can not buy them out and just shut them down. Still a big challenge ahead for them though.
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Old Jan 24, 2014, 07:52 PM   #20
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Originally Posted by MellowFuzz View Post
The main value in developing a payments solution is to bypass the credit card companies completely - cut out their percentages.
Not as easy as you'd think, and not necessarily worth it. Aside from losses, the discount rate for a merchant as large as Apple would be ridiculously small, think on the order of less than 0.1% + transaction fee (probably even less than that). Once a merchant start processing in the billions and tens of billions, their discount get ridiculously small.

Any system that maintain real monetary balance also require the provider to be a bank, otherwise it's illegal. I don't see Apple being in the business of becoming a bank.

End users would still have to fund their account, while it's cheaper if you can ACH money out of their bank to fund an account, you would become a bank at that point, and that's a whole different can of worm with regulations and liabilities. So I don't see either of those as realistic reasons.

What's more likely driving this is ecosystem locking. It would give Apple a huge advantage in completing a circle of services in consumer daily lives and create a much deeper locking to a single ecosystem, ensuring their market dominance for decades.
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Old Jan 24, 2014, 07:57 PM   #21
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Originally Posted by MellowFuzz View Post
The main value in developing a payments solution is to bypass the credit card companies completely - cut out their percentages.
Or Apple becomes a card Issuer and gets a percentage of their percentage, for not just iTunes but lots of transactions through the iPhone.
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Old Jan 24, 2014, 08:18 PM   #22
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Lets hope so I hate paypal.
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Old Jan 24, 2014, 08:49 PM   #23
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Originally Posted by MellowFuzz View Post
The main value in developing a payments solution is to bypass the credit card companies completely - cut out their percentages.
Except that apples cut from the vendor will certainly be higher
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Old Jan 24, 2014, 09:07 PM   #24
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This will be linked to our iTunes account? I better stock up on 20% off iTunes gift cards!
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Old Jan 24, 2014, 09:10 PM   #25
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Hmm interesting... this could be good.

NOW MAKE A BIGGER IPHONE.
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