SAN FRANCISCO - Apple€™s unveiling of its Passbook app has Wall Street analysts questioning whether the company will soon develop "iPay," a hypothetical mobile-payment platform. The announcement also has Credit Suisse musing that Apple has the potential to become a "game changer" in online payments, noting that the company "has the most potential to disrupt the payment system," writes ReadWriteMobile.com.
Creating iPay is ambitious, if it transpires, but there are also a few key benefits. For one, Apple would no longer have to pay Visa and MasterCard for transaction fees. The company could also "expand its core hardware business" with a new product line of retail POS terminals.
Passbook, meanwhile, aggregates a variety of consumer-retail items such as digital coupons, stored-value cards, loyalty points, movie tickets and boarding passes into a mobile app. Although the app does not handle credit card transactions, it requires users to go through their iTunes account, which links to their card information.
At the annual World Wide Developers Conference, Apple "revealed a statistic that hints at its potential to shake up the consumer-credit industry," notes ReadWriteMobile.com, which is that the company has 400 million active accounts in iTunes, each with a valid credit card number. Using NFC, the iPhone "could replace the plastic credit-card as the way iPhone users pay for lattes, groceries or impulse buys. In short, iTunes may be about to graduate from a way of buying apps and music to a way of buying all kinds of things."
The news source notes that Apple aggregates its iTunes purchases made over several days into batches, which reduces the per-transaction fees that it pays to Visa and MasterCard. "It gets away with this because, well, it's Apple."
The company could also bypass the card companies entirely but building its own online-payment infrastructure "and offering discounts or other incentives to those who choose it for iTunes and other payments€¦It also has the network infrastructure, and it could work directly with banks to strengthen it."
But "to pull off such an ambitious plan, Apple would need to persuade many of its 400 million iTunes customers to trust it to handle payments for everyday purchases. Passbook may be an experiment to test consumer behavior around making non-iTunes transactions on iPhones. Apple would also need to win the trust of retailers, even as iPads are starting to appear in retail storefronts. But most importantly, Apple would need to navigate the complex world of financial regulations, not just in the U.S., but in every country where it offered iPay," writes the news source.