By Optism Team, Sep 7, 2012
In June, Apple unveiled the new features of its pending IOS 6 mobile software release, including a new app called, Passbook. This is a mobile app that organizes store cards, gift cards, coupons and even boarding passes and concert tickets. Apple describes Passbook as;
Your boarding passes, movie tickets, retail coupons, loyalty cards, and more are now all in one place. With Passbook, you can scan your iPhone or iPod touch to check in for a flight, get into a movie, and redeem a coupon. You can also see when your coupons expire, where your concert seats are, and the balance left on that all-important coffee bar card.
As of now, Passbook is a more like a “mobile wallet” that doesn’t let you actually purchase goods, but it does organize your bulging wallet full of physical cards and tickets.
With the introduction of Passbook, Apple is squarely focused on convenience for the mobile consumer rather than mobile spending. Users of Passbook would load the electronic versions of their store card, coupons and tickets and then the cards appear into flaps that can be pulled up as needed. Passbook would be time and location sensitive, so for example as a user reached the airport boarding gate the boarding pass appears on the iPhone lock screen.
The location awareness will be a very compelling feature of Passbook. By delivering content to the user when they need it -- makes life easier. The app could record location behaviors and could anticipate a user’s needs, providing even more value. Apple could mine this data to reach out to advertisers with not only historical data but predictive data, i.e. we estimate that 435 people will buy a Mocha Cappuccino at a Starbucks in Dayton, OH today.
The big elephant in the room for the mobile payments industry is Apple’s iTunes. Apple has 400 million active iTunes accounts tied to credit cards that it could connect to Passbook. Apple already has a mountain of consumer data about people; Apple knows the music they like, the apps they have downloaded and the movies they like. Connecting iTunes to Passbook will provide Apple with billions of additional consumer touch points.
Apple made another move in July which could impact Passbook’s eventual entry into actually enabling mobile payments as it was announced the company intends to acquire AuthenTec, a mobile software security and fingerprint authentication company. Apple has not said anything publically about the acquisition, but AuthenTec could provide a fingerprint solution for secure mobile payments. The fingerprint technology could make your mobile payments secure in case you lose your phone as well as eliminating the need for passwords. The technology could be rolled out to the next iPhone after this fall’s introduction.
Apple isn’t the only one making mobile commerce news as there has been a flurry of recent announcements from Apple’s mobile payment competitors; including the Square/Starbucks agreement, the PayPal/Discover partnership and the formation of Merchant Consumer Exchange consortium of big retailers like Wal-Mart, Target, CVS and Best Buy.
For now, Apple is playing it cautious by introducing the Passbook mobile wallet app while it waits for the mobile payments market to mature and evolve. By focusing on delivering a mobile convenience rather than a “mobile payments” app shows that Apple is squarely focused on the needs of the consumer. Apple has not said whether the new iPhone 5 will contain NFC or whether it will connect Passbook to its 400 million iTunes customers.
For Apple, it is not about being first with mobile payments; it is about being the best at delivering value for consumers.