New rumors stemmed from an Apple Patent Suggest that Apple will be attempting to use what spectators are now calling iWallet. While everything at this point is speculation, Apple’s patent seems purposely general in order to encompass a number of different options. This New Technology could be the end of Credit Cards for many people as it would give them a way to store account info directly on the phone or on a web service accessible from the phone. There are two pieces of rumored technology that could support wireless communication for transactional services. One piece of existing technology is NFC (Near Field Communication). NFC is a very low power communication protocol that has a very limited range. The other rumored technology that is already incorporated into the iPhone 4s is Bluetooth 4.0. Unlike NFC, Bluetooth 4.0 has a communication range of around 160 feet which makes it ideal for ease of use. Since Apple already has the technology in place for Bluetooth 4.0, I believe this is the most logical option. Apple only needs to create software to make it happen.
Regardless of which method Apple would go with, there are a number of hurdles Apple will have to overcome for this technology to be successful. of these hurdles I believe the following will have to be addressed: Security, Industry Support, and Ease of Implementation.
Above all concerns is obviously Security. People will refuse to use any Payment method created by a third party unless they are 100% confident that there is no way someone can pick up or hack their information. Apple would also need security systems in place so that if someone lost their phone there would be no cause for concern. An encryption system would need to be in place that would prevent someone from picking up the wireless signal and stealing customer information. This is a substantial hurdle but it is one that Apple could solve fairly easily.
Industry Support from both credit card companies and retailers is probably the largest problem Apple would run into. The credit card companies may be a non-issue because I imagine Apple would offer a pay pal type of service and allow for payment of items through an iTunes account. No doubt if Apple does implement such a service, someone is going to have to pay for it. Here lies the second hurdle in industry support. Retailers already pay more than they would like in order to handle credit and debit card transactions, they certainly would not appreciate paying an additional premium for iWallet transactions. The extra cost incurred here would most likely deter any retailers from adopting the new technology which would kill iWallet before it starts.
OK, so what if Apple does manage to overcome security and industry support? They still have to make it easy for both the users and the people offering the service to users. The issue here is either NFC or Bluetooth capability is needed on the retailers end. This extra cost up front would most likely keep most retailers from ever implementing it. Remember paypass? When paypass first came out I thought it was a genius idea because I no longer had to worry about the magnetic strip on my credit card wearing out. Unfortunately, the paypass reader was not adopted by many of the retailers and the technology just kind of died in the US. The is another count against a successful iWallet implementation.
The last bullet in the head for the iWallet lies in the smartphone market. While iPhone is a huge part of the cell phone market, it does not account for all of the market. Even if apple can overcome all of the aforementioned hurdles they still have this last problem. A retailer is not going to adopt a solution that will not allow everyone to pay. So unless Apple comes up with a unifying solution that is just as applicable on an android platform as it is on an iPhone, the iWallet won’t work.
At this point in time I believe the iWallet app is a pipe dream for the US. In order to successfully launch an iWallet app, Apple will need to create cross platform solution that is easy and cost effective for the retailer to implement. Given the general competition between the smartphone markets I don’t see collaboration as something that will happen anytime soon. If an application such as iWallet were ever to exist it would have to be a third party implementation whom creates a recognized standard that all cellphone manufacturers adopt. Maybe someday major credit card companies will collaborate and push through an IEEE standard for digital transactions on smartphones and cell phone manufacturers will simply just implement it. Until then, you can forget the iWallet. Best case scenario will probably be an even more convenient way of paying at the Apple store.Joe Hoffman
Arora, Nigam. Apple’s New iWallet Patent Hints At New Killer App. retrieved may 21,2012, from http://www.forbes.com/sites/greatspeculations/2012/03/09/apples-new-iwallet-patent-hints-at-new-killer-app/
Lory. How Apple and iPad Plan to Take Over the Cash Register in Retail. retrieved may 21,2012, from http://www.padgadget.com/2012/05/21/how-apple-and-ipad-plan-to-take-over-the-cash-register-in-retail/