Insiders from Apple have laid out claims that a mobile payments system will be one of the hallmarks of the incoming iPhone 6 line. Piecing together the tech company's actions with rumors, its virtual wallet moves deep into territory full of snares for rival platforms.
Neither near-field communications (NFC) or apps for reading bar codes are new, but Apple's virtual wallet system is expected to strike the perfect balance between customer needs and services.
"Everything that has been done so far has not been customer-focused at all. It's all been focused on the manufacturers and carriers," says John Haro of Vibe, a firm that advises retailers on mobile payments.
Right now PayPal leads sits atop the market for the digital wallet, according to a Thrive survey of U.S. adults who've used a digital wallet. PayPal was used by 79 percent of individuals who used at least one digital wallet, Google Wallet was at 40 percent, and Apple's Passbook sat at 17 percent.
Google Wallet and Isis Wallet (rebranding itself to become Softcard for political reasons) have already launched mobile payments solutions that employ NFC tech to swap information with point-of-sales systems. Apple's degree of success in delivering an NFC solution for mobile payments will help to determine if the tech company is late to the party or will end up being the life of it.
"Smartphones didn't take off until Apple came in," says Mary Monahan, research director for mobile at Javelin. "Tablets didn't take off until Apple came in. A lot of people are hoping that this is a game changer."
In a related Thrive survey, security and convenience were the top two reasons cited for not using digital wallets. Approximately 46 percent of the survey's respondents pointed to security concerns, around 37 percent said other forms of payment were more convenient, and roughly 32 percent stated they never really thought about it.
Apple has worked to address security concerns by dedicating a portion of the incoming iPhone's logic board to the storage of financial details. The company is also said to have partnered with MasterCard, American Express and other financial institutions to create digital, locally stored versions of customer's existing credit cards.
On the convenience front, Apple's Touch ID confirms a user's identity and could eliminate the need to sign receipts or enter pin codes.
If the mobile payment system is as rumors describe, users would simply wave the handset near an NFC terminal. Primary payment methods and digital coupons would be sorted in Passbook -- coupons and local promotions could also be pushed into Passbook through iBeacon and the likes.
