Apple’s 2 Payments Paths For 2014

2:33 PM EDT December 20th, 2013

After a less-than-stellar summer that saw the vultures circling Cupertino, Apple righted its course this winter posting impressive Black Friday sales numbers and releasing head-turning point-of-sale (POS) innovations.

Not every expert abandoned Apple and its proven innovators, though. Market Platform Dynamics (MPD) CEO Karen Webster broke with the ranks, publishing seven reasons mobile commerce would be the company’s ace up the sleeve this October.

Webster lauded Apple for its still untapped payments potential, noting that Apple has more digital wallets than any of its competitors, dedicated users who control the bulk of U.S. spending power and a lock on both endpoints in the ecosystem, consumers and merchants.

Going into 2014, Apple is set to enter further into the commerce space as former Burberry CEO Angela Ahrendts joins the team full time. But, Ahrendts and Apple are facing a difficult choice, which endpoint, consumers or merchants, holds the key to unlocking its full commerce potential?

1. Merchants - Apple’s first payments path in 2014 would be to go full throttle to enable the ongoing retail revolution in payments. And a lot of merchants are already head over heels in love with Apple and using their products, since many of them are being used as POS systems today. Merchants could be further enticed with the possibilities of relevant and real-time in-store communication via its iBeacon technology since the consumers with the big-time spending power actually schlep around the stores now with their iOS devices – which are compatible with this new platform. It’s a strong argument that suggests that if merchants adapt these solutions, then consumers will be defacto-enabled to use their phones in stores, and their iTunes accounts, already linked to payment methods, to pay for those transactions.

2. Consumer payments - With so many digital wallets now, experts have long noted that Apple has a clear path toward consumer payments, one made more significant given its integration of biometrics on the Apple iPhone 5S which overcomes a big area of concern for consumers – What happens to my mobile wallet when my phone is lost or stolen?

PYMNTS Contributer Jeff Green noted in a November report that Apple’s progress on securing payments with this feature could be a watershed moment for the industry, one that everyone should be watching closely. Still, since payments is a chicken-and-egg business, even if Apple creates a ‘killer shopping app’ that is secure and that everyone wants to use, merchants still have to accept it. They would certainly be very motivated to do that given the potential volume and incremental sales volume that they could deliver, but it would have to be “killer” for enough consumers with enough volume to want for merchants to pay attention.

So, which of these two options do you see Apple pursuing in 2014? Share your thoughts below:

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