Apple Inc. (NASDAQ:AAPL) is once again the subject of speculation about whether or not an iOS-based mobile payment system is in the works. On the one hand, Apple already has a database of over 800 million credit cards and a robust payment and security system in its iTunes store, and this fact was directly highlighted by Tim Cook in statements accompanying the Q2 2014 revenue report. On the other hand, analysts from such places as Wired ponder whether there is enough money in payment systems to attract the Cupertino firm’s attention.
Some suggestive facts related to this question include:
- Apple Inc. has the largest database of customers in the world, nearly 4 times larger than Amazon’s and 5 ½ times bigger than PayPal’s. The company already has credit card information for practically all of these accounts, indicating that these people are willing to trust Apple with their financial data.
- A growing piece of Apple’s earnings “pie” is coming from services rather than hardware sales. Services, sales of apps and software, and other relative “intangibles” made up a full 10% of Apple’s Q2 2014 revenue, indicating the direction of this trend. If Apple views services as being a way to continue growing its profits, then payment processing outside its own ecosystem is a fairly obvious next step.
- A universal Apple mobile payments system could potentially tie in neatly with the iBeacon system everywhere from supermarkets to sports fields and museum gift shops.
- Tim Cook stated that TouchID was introduced at least partly to make mobile payment transactions more secure.
- Apple is also interviewing “senior payments industry executives” on a quest to find people to run a new mobile payments division.
The data seems to suggest that Apple Inc. (AAPL) is indeed planning, or at least strongly inclined to plan, an entry into the mobile payments field in the near future. The job interviews with payments industry executives are particularly suggestive, since these interviews are corroborated by objective outside information and are not a mere offshoot of rumor. Added to this, the other facts also appear to add up to just one conclusion.
However, if Apple is still in the “job interview” stage for the people to head a new mobile payments division, the launch of this service is clearly quite a distance off. The mobile payments division does not exist yet, has no staff and no directors. This might indicate that “AppleBucks” or whatever the system ends up being called is years in the future, not just months.
However, Apple’s recent explosive transformation of the sapphire crystal manufacturing world with a facility built in just a few months illustrates how quickly the Cupertino firm can achieve a goal if it deems it important enough. Mobile payments are likely not that significant to Apple’s strategy, but there is always a slim chance they are.
