Apple has announced a number of new features for iOS 6 that will include an app called Passbook which the company says is “the simplest way to get all your passes in one place”. The app enables users to store electronically all their regular loyalty cards, vouchers, coupons and tickets in a single location on their mobile handset.
This is not a mobile wallet, at least not yet. Apple’s announcement makes no mention of using the app for payments (and certainly the Passbook name does not carry any such connotations). Also users cannot add their credit cards to the app which is one qualification for being considered a wallet. Nor has Apple talked about making iTunes-based payments via the app although it did say it now has 400 million active accounts in iTunes which are linked to credit cards. That's quite a number to throw around and to bear in mind for Apple's future plans. Finally, the company made no mention of using NFC or any other means to enable mobile payments to take place, a necessity for a mobile wallet.
But Passbook is a distinct step towards a mobile wallet (if Apple wants it to be). Let’s assume for a second that’s the direction it is heading. If so then why is Apple doing this now? A survey last week by the US consultancy Carlisle & Gallagher gives a few clues. The firm conducted a survey of attitudes among US consumers towards mobile wallets.
Among the questions asked by Carlisle & Gallagher was whether consumers would consider an alternative to their existing banks for providing a mobile wallet service (53 percent said they would). The next question was who is the best alternative? Given a choice of Apple alongside PayPal and Google, so called “techno shoppers” (what Carlisle & Gallagher defines as users most attracted to the shopping and social features of mobile wallets) approximately 50 percent of respondents choose PayPal with 30 percent chosing Google and just 20 percent for Apple.
The firm also asked the same question of “payment optimizers” who are defined as users who will use mobile payments if it makes sense financially. Again a similar result with PayPal in front followed by Google and Apple in third place. Unsurprisingly the group branded as “traditionalists” are least likely to choose any of the three but here again Apple came in third.
This rating may seem surprising given how prominent Apple’s brand is in general. But just think about the mobile payments market for a second. PayPal has an established reputation in online payment and has kept up a steady stream of announcements in recent months to establish in the public’s mind its move into handling payments for physical goods.
These announcements include alliances with various retailers and infrastructure suppliers as well as the launch of PayPal Here, the service that enables small businesses to process credit card payments using an iPhone (ironically enough).
In comparison Google Wallet has had a rough time in establishing itself since its launch last autumn. The company has not announced user numbers for its wallet service but the perception is of underachievement which rubs off on how users see the brand. But at least Google has a presence in the payments market, which is more than Apple.
I am sure Apple would have scored more strongly in the past. Its problem is that users appear to associate it less with mobile payments or generally with transactions via the mobile handset than its rivals. And this trend is only likely to increase as it sits on the sidelines. If Apple has become aware of this discrepancy then it might explain its action in making a first move towards the mobile payments market. In the meantime, media and user speculation about Apple and its intentions will help take the shine off rivals such as PayPal.
The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members.