Apple Passbook Looks To Be The Future For Mobile Wallet

Apple's holder for electronic items shows great promise.

The reporting of the latest Apple iPhone has been consuming the news cycles with all that it has to offer. Or not offer in the case of the problematic Apple maps and all the quality issues which are showing up. At some point, Apple will get that resolved and the problems will go away. But the big take away is for Apple's Passbook feature which is part of iOS 6 and holds lots of promise for what it can do for you. And that is even though Apple has not included the Near Field Communication (NFC) chip in the iPhone 5. Apple has decided to not jump in the middle of NFC and all the fragmentation which has been going on this year.

Their new Passbook feature provides them with an alternative to the not yet ready NFC and one that looks to be extremely popular. Though it was just released last week, things are already up and running. Major League Baseball (MLB) is on board at the start using Passbook for electronic tickets at 4 league ball parks. And many others are going to be providing their app to be used in conjunction with Passbook. While Starbucks already had their app for handling payments, they are going to be adding a new app for buying your Starbucks coffee contained in Psasbook. And they are just one of many.

And there is work under way to use Passbook for tickets at College games this year via StubHub. Target is providing coupons in Passbook which can be redeemed from scanning the screen. Airlines are moving towards using the Passbook interface for displaying electronic boarding passes instead of paper ones. Amtrak is working to get it operational for tickets and the list is going to continue to grow quickly.

All of this shows that Passbook is going to set a new standard which the rest of the industry is going to have to follow in order to keep up. For the next year, the concept of a Passbook is going to be followed by others. Including Android, as this is a very hot idea and one that has needed to be implemented for holding things in a Mobile Wallet which you previously had to hold in your physical wallet. That is the technology shift which we all thought might be in place earlier this year. But Passbook is not focused around making payments and that is the beauty of it.

The future for Passbook seems to be wide open right now and may continue that way for a long time. Think about putting those annoying gift cards into Passbook instead of carrying them around. That would be novel. Or those cards you carry for being a loyal customer. Instead of carrying them in your wallet, they would be in your phone. It would be great to reduce the size of my wallet by removing a few cards.

And there is nothing to stop Apple from implementing a different method for making mobile payments. Some have speculated that Apple could use BlueTooth to accomplish mobile payments instead of relying on NFC. That may not work with some of the new POS devices, but it could be possible. And I am sure that Apple is already looking at alternatives for doing Mobile Payments.

It is all about the future and Passbook shows us the future now.

Does iPhone Lack Of NFC Hurt Future Of Mobile Wallet?

Apple makes decision to not include NFC chip in latest phone.

The future for NFC and Mobile Payments has a variety of different companies involved. And here in the US, Isis seems to have a lead over other competitors by signing up Verizon, AT&T and T-Mobile for their services. This association should further the future for the Mobile Wallet and the use of your mobile smart phone as a way to make payments. The process has been slowly making its way towards the mainstream process. But the release of the iPhone 5 without the necessary Near Field Communications (NFC) chip threatens that future. It would seem Apple has, with the omission, impacted the forward progress of NFC because of their popularity in the US.

Does this mean that NFC payments are going to be delayed? The answer to that is Yes, but the question of just how much it will be slowed is unknown. There is the possibility that Bluetooth could be configured to handle mobile payments for the iPhone. But for now that options does not exist. It makes one wonder why Apple decided to not include the NFC chip in their phone. Just as they did a year ago when they did not include the 4G LTE chips in the iPhone 4S, it appears they believe that NFC is not yet ready for prime time. Given they do extensive research, they are probably right and a year from now things may be more settle.

Even the Olypmics decided not to use Mobile Payments because they were not fast enough in processing transactions. That would tend to indicate that there is far more work to be done to move Mobile Payments and NFC into prime time for consumers.
In a survey by CreditDonkey.com, it seems that people are not yet ready to completely trust the idea of the Mobile Wallet. There is more of a trust in making credit card payments to Amazon (60%) over others with PayPal coming in second at 30%. Payments to Google and Bing with a credit card rate quite low in the survey.

While a large percentage of people use their smart phone to price comparison shop, it is a big leap from that to using your smart phone to make a purchase. And it does not look like that situation is going to change over the next year. The shift in being confident in using a smart phone and a Mobile Wallet is going to take far longer than realized. Things should have been mainstream at the beginning of the year, but that has not happened. And there are still too many players fighting for a piece of the action and standards still to be completed. It definitely looks like a year from now is more realistic.

Do you trust the idea of a Mobile Wallet?

Mobile Wallet Field Getting Very Crowded

More players being added as the year progresses.

We have seen how things were expected to be in full swing in the 4th quarter last year for the Mobile Wallet, but that never ended up happening. Some of that is more than likely due to a decision by Apple to not include the Near Field Communications (NFC) chip in the iPhone 4S. Apple moves markets and without that, things slowed down. And in reality. there is not enough smart phones here in the US equipped with NFC chips. You add to that the competition in the 4th quarter between Google's Mobile Wallet and that of Isis. We all remember the basic refusal of Verizon to allow for Google Wallet to be installed on the Galaxy Nexus.

I had talked about how the Mobile Wallet space was being fragmented and in the past few months, it appears to have gotten worse. We heard last week about retailers here in the US in what they are calling the Merchant Customer Exchange (MCX). This is a series of retailers, including WalMart and Target, who are joining forces to create their own system for accepting payments and clearing them. Another new player in a growing market, long before the idea of the Mobile Wallet has taken hold.

I had thought that things would take longer to be adopted here in the US, but it looks like it is going to take even longer than expected. Much if this is because there is still a struggle for the dominate players in the market. There are rumors floating around that Apple is getting into the Mobile Wallet business through their Passbook app which just came out. That would create an even more crowded field.

Another recent addition is PayPal and Discover who are teaming up to provide Mobile Wallet services to retailers. Visa has been testing their POS devices for close to a year and is another player in this field which is getting more crowded. And there are others involved in trying to get their Mobile Wallet to be the one that leads the field, such as Isis. There are a lot of big names here and a lot of money being put behind all these various methods.

If the Mobile Wallet is going to take hold for this coming holiday season, there is going to have to be some standards established and agreements for what can be run on all the various smart phones. Each POS device can be handled by a different company to potentially handle the payments. The big issue is what is being run on the smart phones with the enabled NFC chips. If all these players cannot figure out a way to cooperate or a way to run multiple pieces of software to allow for having multiple Mobile Wallets so to speak, it is not going to happen this year.

Many are interested in seeing the Mobile Wallet come to be this year. Do you think it is going to happen in 2012?

Mobile Payments Fragmentation - Growing Number Of Players

Growing field of mobile payments increasing with standards still to be determined.

 
The idea of Mobile Payments is one which is expected to take hold this year around the world. The US appears to be a little slower on the uptake for getting on board, but it is the supporting structures which are necessary to make this happen. From the mobile phone and the Near Field Communication (NFC) chips which are embedded, the necessary flow from that point on needs to be provided and is being worked on. The Point Of Sale (POS) devices are being installed in retail outlets and you probably have seen them already. It is the handling of the transactions which has been the problem because of a lack of standards. The first company to get the biggest share of the market will probably have more leverage in establishing their standards for everyone else. The latest one to join the push is MasterCard and their PayPass Wallet.

This was announced this week and joins a growing field of players which look to fragment the market along with fragmenting the standards. There are at least 4 primary players now including MasterCard PayPass, Google Wallet, Visa PayWave and PayPal Digital Wallet. There is also the Isis group and their mobile wallet of which MasterCard and Visa are members of the group. Exactly how all of these will work together is an unknown right now. It would appear that the Isis group is working to handle the mobile payments from the back end so that they can go through a bank, credit card or wireless carrier's bill.

There are all these competing methods of making payments from the mobile device via NFC and it at times causes problems. I am simplifying the process and only talking about the NFC and in reality, there are other chips and processes involved in making mobile payments. When the Samsung Galaxy Nexus was about to be released by Verizon, problems as to whether they would support Google Wallet became an issue and in the end, Verizon chose to not use Google's payment method. Instead they are going to be supporting the Isis group and the methods that are determined there. Whether they go with the MasterCard or Visa mobile solution has yet to be announced by Verizon, but we can expect to hear that decision this year. Given that Google has worldwide coverage, this will create more fragmentation in the market and standards.

It is the fragmentation which looks to be coming as a potential problem. Each wireless carrier is going to potentially have a say as to which one their wireless network is going to be supporting and that is a problem. When you purchase a smart phone from a carrier, you will more than likely be forced to use their predefined method for NFC payments. If you switch wireless carriers in the future, how you make your payments will more than likely change given the way that things are looking right now.

Given that Google has their Google Wallet, we can expect that Apple has some payment method in the works as well. We have not heard from them, but knowing the past with Apple, they have something which we will hear about when the NFC enabled iPhone 5 is announced.

In Asia, they are already using mobile payments and have been for years with a majority of the population using the payment system. They have one primary method which sets them apart from what we are seeing. And of course the US has to do things differently. One of those differences is to make sure that things will work around the globe. In Asia, many of the systems are local to a country and not much further beyond that.

Where all this is going to end up and which standards are going to be established is up in the air. We do expect to see more competition this year, such as Apple entering with their version. This is leading up to the US utilizing mobile payments in a way we have never done before and may take years to gain the kind of acceptance which is needed. For now, there appears to be growing fragmentation.