Apple Feels out Reception to Payment Network

May 30, 2014 by

Image credit: Pietro Zuco

Preliminary talks are indicating that Apple is laying the groundwork for their own payment network.

The source, which requested anonymity, told 9to5Mac that Apple is feeling out the retail climate by speaking with executives at retailers that sell high-end goods within the last few months.

Apple has been wrangling up former executives from payments companies, including eBay, JP Morgan Chase, and Visa, which indicated that something payments related was in the works.

Apple would likely introduce a software-based mobile payment system integrated into consumers’ iTunes accounts, foregoing NFC.

This would provide backwards compatibility with previous generation iPhones and iPads, while leveraging Apple’s staggering number iTunes accounts, at a reported 800 million.

Apple’s iBeacon may be a big piece of this payments puzzle.

The Bluetooth low energy-based hardware is currently being enabled at select Apple stores. They allow for location tracking in stores and seamless payments without checkouts.

Their low cost, along with bringing value to merchants with the analytics that they can provide, may make an iBeacon payment network an attractive option for retailers. Combined with Apple’s brand and reputation for creating an engaging user experience, it seems that Apple may become a leading contender in mobile payments.

According to Mark Ranta, Senior Solutions Consultant at ACI Worldwide, “I do think that if Apple hops into the mobile discussion, they instantly become the player due to the size of their iTunes account and how that works today-you would immediately have millions of instant wallet users able to pay with your iTunes account.”

However, don’t expect Apple’s payment network to launch any time soon. The source said that the talks were exploratory.

The landscape is full of retailers all using disparate technologies to carry out payments and it will take some time to not only gauge what retailers want, but also what consumers are most comfortable with using.

 

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