Piecing Together Apple’s Payments Puzzle

In the game of payments chicken, Apple refuses to flinch first.

As dozens of other players in the payments industry fight over scale and consumer acceptance, Apple remains content to sit on the sidelines, waiting for the right time to strike. Mere speculation surrounding Apple’s future in payments is enough to set analysts abuzz and cause potential rivals to sweat.

While some were disappointed by Apple’s lack of a payments announcement at WWDC this week, most knew better than to expect a major reveal. Instead, savvy sources from around the Interwebs poured over every detail of Apple’s conference, and surely enough, some pieces of Apple’s payments puzzle began to emerge.

We still don’t know if (or, more likely, when) Apple is going to make its first major payments play. But here are the biggest hints the tech giant dropped this week as to how it could come to impact the payments industry.

Credit Card And Keychains

At WWDC Apple carried on with its status quo, refusing to reveal any real substantiate updates to its payments plans. But Apple did reveal one useful payments nugget that’s spread like wildfire across the industry ever since: the company has 575 million credit cards in its system thanks to its iTunes platform. Big numbers are easy to overlook in payments sometimes, so how’s this for a little perspective: Apple has more card numbers than any other online retailer in the U.S.

And Apple is planning to put those numbers to good use via an update to its iCloud Keychain, which will store credit card numbers and expiration dates in devices. Using 256-bit AES encryption, the Keychain will sync up to other trusted devices, and could have some interesting implications of e- and mCommerce.

If scale is one of the main problems that any serious payments player must tackle, Apple largely already has that problem solved.

More Apple Payments Patents

Last week we covered a patent application by Apple that hinted at some potentially juicy payments capabilities for future mobile devices. Between its mentions of virtual currencies, digital wallets and NFC, the patent application alone was enough to capture the attention of many in the payments industry.

But on Wednesday we revealed that Apple was awarded an actual patent for an “iWallet,” complete with a system allowing primary account to control subsidiary accounts. Users will control iWallet accounts through “a future segment of their iTunes app currently dubbed ‘Mobile Pay.’” That would seem to mesh quite well with the impressive card storing statistics we referenced earlier.

The iWallet patent application comes as one in a series of 37 granted to Apple this past week.

Passbook Gets QR Code Scanning

Apple didn’t make any mention of its Passbook app at WWDC, but just a few days later, details about what iOS 7 could mean for the app began to emerge. Credit iMore for the discovery of Passbook’s new QR code scanning features that will come up with Apple’s next software update. In the upper right-hand corner of the revamped Passbook app, Apple displays a “Scan Code” button that’s designed to let Passbook users add cards via QR codes.

What’s really interesting about this feature, though, is that some are arguing that it doesn’t mean that Apple truly buys into QR codes. In fact, it could mean quite the opposite. As we wrote in our trends piece, a TechCrunch report argues that

“Since Apple didn’t build a general purpose QR code reader – but rather one that works exclusively with Passbook-enabled codes – Apple is actually making QR codes subservient to their app.”

It’s an interesting take on Apple’s QR code news, and one that shrouds the tech giant’s payments approach in even more mystery.

So what’s your reaction to all of the Apple payments news this week? Is this much ado about nothing, or do you see Apple poised to break in to payments as a major player?

Let us know in the comments below.

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The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

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