With the announcement of the Passbook app for iOS 6 many people have been speculating that Apple may be considering a mobile payments service for the next iPhone. This rumour would make sense considering the existence of Google Wallet and various other mobile payment schemes that are starting to gather momentum. According to the Wall Street Journal however, while Apple initially discussed the possibility of a mobile payments app when Google Wallet was first launched, Apple has no plans to release a mobile payments service any time soon.
Scott Forstall had headed a team at Apple that had explored various “wallet app” implementations, but the idea was soon dropped after the company decided that such a system would be too complex to manage, with relatively little benefit to the company or its customers in return.
Along with complexity, some of the chief concerns at Apple regarding a mobile payment app for the iPhone included uncertainty about the security of such systems, and also the possibility that poor services provided by third-party retailers utilising the payment system would reflect badly on Apple. Instead, Apple dropped the idea of a mobile payments app and decided to focus instead on the much simpler and more secure Passbook.
While Passbook was originally thought to be an NFC powered app, the stated features of the app would not require the use of Near Field Communications to operate – thus making Passbook compatible with older iPhone models. Passbook will allow iPhone users to hold airline tickets, movie tickets, loyalty cards and discount coupons, and similar items, utilising location based services. As an example, having an airline ticket stored on Passbook will allow your iPhone to alert you if your plane is cancelled or changed to a new boarding gate.
In the meantime, Apple is thought to be waiting for its competitors to do its market research for mobile payments first. If mobile payments become a well-established and trusted service, then Apple can easily produce its own version or acquire an existing mobile payments service and be guaranteed success from it. If mobile payments flounder, Apple will have lost nothing by sitting on the fence.
Although Google Wallet has been around for some time and Samsung plans a large scale trial of its own mobile payments system at this summer's Olympics in London, there is still no widespread system in place and most consumers still have their doubts about privacy and security of personal and financial information. Until the industry produces a standard cross-platform system that is adopted by a large number of retailers, and companies do more to address the concerns of consumers, Apple may have made the right choice by choosing to omit mobile payments from the iPhone 5.