Mobile payment technology is supposed to be the wave of the future, but so far smartphone payments haven’t gained much traction. PayPal and Google have both made starts with mobile wallet solutions, though neither has seen widespread adoption. Now, as Apple may be getting into the game, the iOS solution just might kickstart the entire mobile payment industry.
Apple and the mobile wallet
According to a new report from The Information, smartwatches and iPhones with larger screens aren’t the only projects in Apple’s pipeline. The tech giant – with more than 40 percent market share of mobile phones in the U.S. – is reported to be in talks with payment industry companies to develop a mobile wallet solution that may be ready in time for the 2014 holiday season.
The report states that the integrated solution would allow iPhone owners to pay for purchases in stores using just their phones, and would involve a “so-called secure element” that’s projected to refer to the iPhone 5S Secure Enclave, which stores and protects Touch ID fingerprint data from access outside the phone, reverse engineering, and transmittal over the Internet.
Deal with Visa reported in place
The Information’s report says that Apple has already reached a deal with major credit card processor Visa for its mobile wallet solution. With more than three-quarters of a billion iTunes and App Store customer accounts — most with stored credit card numbers — Apple is uniquely positioned to make such a deal work.
But a direct partnership between Apple and Visa is not likely to be an exclusive arrangement. This powerhouse combination could serve as the first step for encouraging massive numbers of retailers to accept Apple payments, which in turn would interest other major smartphone brands like Samsung, LG, and Sony in exploring integrated mobile wallet solutions to meet market demand.
Apple and the ripple effect
When it comes to mobile technology, Apple has been a pioneer across every segment. The iPod, iPhone, and iPad each introduced groundbreaking features and technologies that other companies were quick to follow. If Apple enters the mobile wallet arena, this ripple effect is likely to bring the competition along for the ride.
The credit processing industry may experience a similar effect. Typically, Visa, MasterCard, and American Express work to capitalize on new fields the competition is entering — so if the Visa-Apple partnership succeeds, other major credit card companies will follow their lead.
Mobile payments have been projected for years, but the technology has not quite realized its potential. Apple’s entry into this new frontier could provide the push other companies need to make the mobile wallet a reality for the majority of smartphone owners.
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