Is Apple Finally Getting into Mobile Payments?

On its latest earnings call, Starbucks executives pointed out that 10 percent of all transactions in its U.S. stores are made with a phone mobile and the Starbucks Card app. In addition, those transactions are enabled by use of Square mobile payments software.

Some observers would say Starbucks is the most successful retail mobile payments service so far, while Square has emerged as the best example of a mobile payments success in the retailer adoption sense or the retailer terminal business.

Some have been waiting for Apple to make a move of its own in mobile payments, building on its Passbook application, which already provides some related functions related to storing coupons, tickets or passes in one place.

Passbook enables users to use a coupon, concert ticket or check into a hotel if a physical coupon or ticket is scanned into an iPhone or iPod touch to Passbook. Passbook also enables such features as automatically displaying passes at a specific time or location, so a user could walk into a coffee shop and automatically have a loyalty card appear, allowing scanning to complete the purchase.

But Apple has other assets, including iTunes, which by definition includes scores of millions of iTunes user credit and debit card numbers.

Still, observers also would note that Apple has been moving slowly on the mobile payments front. That appears to be coming.

Isis, the mobile commerce joint venture created by AT&T Mobility, T-Mobile US and Verizon Wireless, says it will introduce the Isis Mobile Wallet nationwide in 2013, with support for the iPhone.

That means the Apple iPhone 5S will feature near field communications for the first time, and that Apple will finally get into the mobile wallet and mobile payments business.

“Support for iPhone, Windows Phone and Blackberry 10 is expected to be introduced later this year,” Isis says.

Up to this point, iPhones have not had NFC support. So the implication has to be that Apple 5S devices will include NFC support for the first time.

The only other conclusion one might draw is perhaps also interesting, namely that Isis is going to add some other form of device communications other than NFC. That seems less likely.

But few would argue Apple is basing its mobile payments strategy on Isis. Instead, Isis would appear to be one more option for an iPhone user. The bigger upside for Apple would come if it can somehow leverage its user base, Passbook app, iTunes capabilities and “one more thing.”

As Starbucks and Square already have demonstrated, mobile payments is a tough proposition until there is clear value. Starbucks succeeded early because it was able to leverage its Starbucks card assets.

Square was able to enable small businesses to accept credit cards, something that had been cost prohibitive in the past.

It seems unlikely that simply enabling Isis creates the better experience that tends to drive Apple product experiences. And that means something else will be forthcoming.