At its launch next Tuesday (Sept. 9), Apple may be able to announce the final elements needed for it to truly leverage the hundreds of millions of payment card details stored within its iTunes and AppStore databases, thanks to deals quietly cut with both Visa and American Express, according to reports from Recode and The Information. These deals, however, reportedly go beyond granting permission to use card numbers that Apple has already collected and used over the years. It will allow shoppers to use their iPhones anywhere Visa and Amex are accepted, provided that retailer can handle an NFC purchase.
With the industry convinced that Apple this time will really and truly launch an NFC mobile payment system, the fruit-named mobile vendor will need signoffs from the major card brands—and these deals should do the trick. “Apple has reached an agreement with American Express to work together on its new iPhone payments system,” Recode reported. “American Express is one of several partners Apple will need to sign up before it can launch its new payments plan, which sources say it plans to announce at its September 9 product event.” That story also noted that Visa has agreed to a similar arrangement, according to The Information.
“Customers will present their phones at the checkout counter of partnering retailers to transmit payment information to complete a purchase. It’s not clear which retailers have signed on to accept such payments,” Recode said, although it’s unclear if a Visa-accepting retailer, for example, would need do anything special to accept such a payment if they are already setup to accept generic Visa NFC payments.
Such arrangements have the potential to finally break the NFC Catch-22 mess, where retailers had been hesitant to go through the effort and expense of accepting NFC when so few shoppers used it and shoppers were equally hesitant to use it when so few retailers accepted it. By being available through every new iPhone and leveraging the massive installed base of Visa (and, to a lesser extent, Amex) merchants, this move could push both retailers and shoppers into giving NFC a try. This would be especially true if various temporary incentives were put in place—10 percent off any purchase using Apple NFC?. A key advantage to this plan is that Apple users historically have been much more willing to experiment with new technologies than their Android counterparts.
“While consumers haven’t widely embraced mobile wallets from Google and a consortium of wireless carriers, industry analysts and executives believe Apple has a shot at making the concept work. Industry sources say Apple believes its iPhone payments system will be as least as secure as traditional payment cards,” Recode said. “Sources believe the iPhone’s Touch ID fingerprint scanner will at some point play a role in the system — either at launch or sometime in the future.”