Saturday, January 25, 2014

Will Apple Transform Mobile Payments?

I have in the past argued that the one technology company that could really shake up mobile payments was Apple. At least so far, though, Apple has not made a move, for sensible reasons. 

Apple's services approach has always been structured in ways that help Apple sell devices in the consumer market, and it hasn't been so clear how an industry-leading mobile payments capability necessarily would create a new device market. 

One might argue such a capability would help Apple sell more iPhones and iPads, but that is a different matter, something more incremental, and not the foundation for a whole new product category Apple can re-imagine and reinvent. 

But that might be changing, as there now are reports Apple is looking at creating a service handling payments for physical goods and services on its devices. Apple's iTunes and Apple Store already process remote payments, though indirectly, linking credit or debit cards to iTunes accounts. 

But Apple perhaps senses the growing role of commerce in providing both direct revenue and indirect business benefits is reaching a point where it could make a big difference. 

Consider the fact that, for the first time in history, major technology leaders have revenue models anchored on advertising (Google) and retailing (Amazon). Now "payments" creates the revenue model for firms such as Square. 

Now we might see whether Apple can transform retail payments and thereby create a major new revenue driver for a technology firm. 

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