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We thought it was coming when Apple introduced EasyPay. That is a system that allows customers to purchase goods using only the iPhone. But EasyPay remains exclusive to Apple Stores. We thought it was coming when Apple introduced PassBook. For the first time, Apple was allowing third-parties like Starbucks to implement a frictionless transaction using only the iPhone. Unfortunately, without broad adoption, PassBook remains on the island of misfit apps, abandoned and forgotten by most users. We thought it was coming when Apple introduced Touch ID. This biometric solution positively identifies and authenticates an individual. This is the Holy Grail for all transactions. But Touch ID is exclusive to one device, and has no connection with any Apple payment system. Now, the Wall Street Journal wants us to believe that this time, it's really coming. According to a recent report, Apple is working on a mobile payment system. And this time, their for real.

WSJ: Apple 'laying groundwork' for mobile payments system

Citing people familiar with the matter, The Wall Street Journal reports Apple CEO Tim Cook and SVP of Internet Software and Services Eddy Cue met with technology industry leaders to discuss a possible mobile payments system rollout. 

Further, the publication learned that Apple tapped executive Jennifer Bailey to build out an in-company payment business. Bailey was previously in charge of running the company's online stores.

Is this reason enough to get excited? I have no idea. Apple has been interested in a mobile payment system for several years. They have been experimenting with NFC for quite a while. They have been in talks with credit card companies. None of this is new. We do not have any details about what the new system might look like, so expect a lot of wild speculation from the press. What we know is that Apple is interested, they are in talks with industry leaders, have a number of technologies already in place, and have the largest pile of credit cards on file. We also know that those credit cards belong to people who have more purchase power than the average person, and tend to use it to buy goods and services. While all of this is true, it has been true for a long time. 

Apple has had plenty of time to study the issue because they have absolutely no competitive pressure from the likes of Google and NFC. NFC technology has been around for a very long time, and is in use in other parts of the world as a mobile payment technology. Bypassing all of the debates about the technology, I will just say that if NFC was going to be the standard for mobile payments, it would have already taken over the world. It has had every opportunity, and with no competition. Yet NFC has failed to catch on despite the support from banks, retailers, and handset manufacturers. We shouldn't even still be talking about this. The fact that we are means that NFC is not the answer.

Google has been pushing its own solution in the form of Google Wallet. However, Google Wallet has a few hurdles I don't think it can ever overcome: For starters, the fragmentation problem will prevent much of the Android user base from being able to access it. Wallet can be blocked by both manufacturers and carriers who have their own agendas to push. Second, Google caters to an economically disadvantaged clientele. To put it bluntly, they are not the ones with the money. Often, the reason a person ends up with an Android phone is because they couldn't afford better options. Many do not have credit cards, and have to resort to carrier billing for apps and such. Even though we are talking about Android, we are still talking about small numbers compared to those who would use an Apple solution. Finally, those who can afford to use Google Wallet are not stupid enough to do it. Android fans don't trust Google with their money any more than I do. That is not an issue for Apple.

That said, I am not convinced that our current payment systems need to be fixed. We already have a mobile payment system in the form of credit and debit cards. I don't leave home without it, and I never carry cash. No mobile payment system eliminates the need to carry cards. You still need your ID, Social Security, Medicare, bus pass, library, and other physical cards. Eliminating one of them does not eliminate the need to carry a wallet full of cards. 

Would it save time at the register? I doubt it. The physical card is not what takes up time at the register. It is the four or five screens you have to go through to complete the transaction on a card reader. If all you want to do is pay for your groceries, it might be faster to right a check. Any payment system is still going to have to accommodate functions like cash back, and tips. Even if Apple found a way to let us use iTunes info for payments, they would still have to deal with point of sales issues like receipts. It is not a trivial matter to convert current POS systems to something that could accept iTunes. 

What would be the benefits of a new payment system> More convenience, reduced POS time, and greater security come to mind. However, I cannot see how any of this is accomplished by moving the system from a universally accepted card to your iPhone. Well, I suppose I can see how it might be more secure. But at the rate people lose and break their smartphones, I'm not sure it would be as convenient. Paying for things is simply not a big enough pain point for me to care. Having enough money to pay for things is my problem. No iWallet is ever going to solve that.

David Johnson

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