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While eWallet Apps are Gaining Steam on Android, Apple Remains well ahead of the Market in the Big Picture

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Today, TELUS, a leading national telecommunications company in Canada, announced the launch of the CIBC Mobile Payment App to TELUS mobile devices with Near-Field Communications (NFC) capability, allowing more Canadians to have access to mobile payments. The system currently only supports select Android and BlackBerry smartphones. Isis, a similar US based system, launched in mid-November. While there's no data readily available today to demonstrate whether the Isis Mobile Wallet has been a success, it's only a matter of time until the public warms up to the general idea of using an electronic wallet app on their smartphone to make purchases instead of using a plastic credit card. With major mobile payment systems now out in Canada and the US for Android phones, is there a chance that we'll see Apple deliver their iWallet solution by year's end?


Apple currently has an extensive library of patent pending technologies and methods supporting a future iWallet application, and although NFC is the technology that both noted mobile payment systems are using today, Bloomberg reported last July that "By working on the iPhone, Isis is indicating that it's expanding beyond a technology called near-field communication (NFC), which hasn't taken off as expected." So it really boils down to Apple choosing the timing of the iWallet, as we know that AT&T and others have said that Isis would support the iPhone.


During Apple's latest financial conference call, Cook noted that "We're seeing people loving to be able to buy content, whether it's music or movies or books from the iPhones using Touch ID. It's incredibly simple and easy and elegant." He also noted Apple was intrigued with mobile payments in general, and it was part of what was behind Touch ID. Yet Cook didn't elaborate on where Apple would be going next with their future mobile payment systems, beyond Touch ID for the Apple Store.


The press release covering the Canadian launch of the TELUS mobile payment app today presented a few interesting marketing points.


  • 19 of the top 25 merchants by volume accept contactless payments
  • There are now 250,000 contactless payment readers in Canada
  • Of the 68 per cent of Canadians aged 18-44 who own a smartphone, 46 per cent say they are interested in using a smartphone to make everyday purchases.


The new mobile payment systems are relatively new and so while the marketing statistics are very encouraging, the numbers presented in the press release really only indicate that the system has the potential of succeeding.


Rumors have been gathering steam since January that Apple has been laying the groundwork for an expanded mobile-payments service, leveraging its growing base of iPhone and iPad users and the hundreds of millions of credit cards on file through its iTunes stores.


The Wall Street Journal reported that "Eddy Cue, Apple's iTunes and App Store chief and a key lieutenant of Chief Executive Tim Cook, has met with industry executives to discuss Apple's interest in handling payments for physical goods and services on its devices, according to people familiar with the situation."


The report further noted that "the potential for Apple is enormous—the company said last year it had 575 million registered users with its iTunes store, and it has sold roughly 375 million iPhones over the past five years and about 155 million iPads since its 2010 debut."


Denee Carrington, an analyst at Forrester Research, stated that "Apple is absolutely the sleeping giant in the payments world. They have the capability; they just haven't tied it all together. If Apple is in the game, it certainly changes the space and would make merchants think differently about who to partner with." And this is the key. Apple can't stand on the sidelines for too long.


Will this possibly be one of the hottest trends going into Apple's developer conference mid-year? Will Apple provide their developers with news of a coming iWallet App tied into Touch ID? Only time will tell.


Yet I can imaginatively hear Phil Schiller, Apple's Marketing VP saying: Adding a simple mobile wallet app to a smartphone: anyone can do that! And then proceed to dive into the depth of Apple's security via Touch ID in conjunction with their new iWallet app. Anyone having watched Phil Schiller's iPhone 5 launch knows the humor to which I'm referring.


Apple, Miles Ahead of the Competition


With eWallet Apps gaining steam on the Android side of the market, some are wondering if will Apple make further moves into the mobile payment market this Year.


Firstly it wouldn't hurt to remember that it's the Android camp that's miles behind Apple on biometric authentication systems successfully working with a smartphone in context with e-commerce, not the other way around.


It's the Android camp who's been scrambling to adopt fingerprint scanners. LG is expected to announce their fingerprint scanner with extra features this year and the buzz is on in the Android camp of the Samsung S5 adopting this as well as we forecasted. So while on the surface it might seem that Apple is late to the mobile payment party, I'd say that Apple is actually ahead of the competition with Touch ID working with the Apple Store.


Let's be honest here. There were likely more transactions going through the Apple Store with Touch ID based purchases this past Christmas than there were for Android phones using Isis during the same time period at brick and mortar retailers. And considering that Isis didn't send out a press release after the holiday season to tout the grand success of their mobile payment system with retailers, I'll go out on a limb here and say it's because it wasn't.


So while there's been noise of late coming from the Android camp and some Wall Street analysts over Apple being behind the mobile payment market, I think that they just can't grasp what Apple has already achieved with Touch ID for e-commerce. Downloading an already created app by Isis on an Android phone is anything but innovative. Anyone can do that! (Thanks Phil). Real innovation on the other hand takes time.


Look, it's just a fact that Apple began working on an e-commerce based iWallet App solution as far back as 2008 when their 2010 patent was actually published. That dates it back to shortly after the iPhone actually came to market. Talk about foresight.


Further, Apple has clearly illustrated the depth of their mobile payment system vision for the iPhone over the course of the past six years. So it's not really a matter of Apple being a sleeping giant in the field of mobile payments as it is about a tech industry giant bringing their massive mobile payment system to market in a sound and logical manner.


In January of this year Apple revealed in new patent applications a secure iWallet system using iBeacon quickly followed by a major new financial system that goes far beyond their initial work on iWallet and even hints of bypassing the credit card system entirely in certain applications like loans.


Just like Apple is reportedly working on ways to bypass the cable companies for Apple TV, Apple is thinking outside the box for a new financial system in certain ways. So an iWallet app is only one small fragment within a much greater mobile payment system that Apple is working on.


Over the weekend, I purchased a few accessories for my Mac and iPhone. I scanned in the items into my iPhone shopping cart App and walked out of the store without talking to a sales rep or standing in a line. Deal done, my receipt was emailed to me. Can you do that at Best Buy today with an Android phone? No. And the funny thing is, my Apple Store transaction was done without an iWallet App. So the myopic vision that some have that Apple isn't working on mobile payment systems like others in the industry is a joke without end. Apple is probably the only tech company in existence that is thinking about the entire mobile payment system scheme of things rather than just a single vision of a tiny eWallet app.


In the end, Apple will make further moves into the mobile payment market later this year by bringing Touch ID to more devices. We'll likely see it coming to at least the iPhone 5C and perhaps on one of their iPad models. That's Apple logically extending the work that they began with the iPhone 5S in Q4.


Beyond that, we'll just have to wait until Apple's World Wide Developer Conference mid-year to find out what Apple has up their sleeve on this front. For now, we can all applaud Apple's real-world work on mobile payment systems and Touch ID which is miles ahead of the competition.


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