You Pay with iPay

Dan Frommer makes a compelling case that Apple might be the first company to break into mobile payments in a big way:

Apple could start by creating the first simple, global brand for mobile payments. Whether it’s called iPay, AirPay, or something else, Apple could start by making something people will recognize. Apple is reportedly going straight to the source, forging partnerships with MasterCard, Visa, and American Express, so there shouldn’t be any question of whether people can link the payment cards they’re already comfortable using.

Apple, unlike Google, has absolute control over what goes into its phones, so it can ensure that all new iPhones—and other devices, such as its reportedly forthcoming wearable gadget—support its payment system. With more than 40% of the US smartphone market, Apple can get this service into millions of pockets faster than any other company. And because Apple insists on having the upper hand in its relationships with mobile operators, it shouldn’t have any embarrassing situations like Google had with Verizon Wireless, which effectively blocked Google Wallet in 2011.

Globally, Apple has something like 800,000,000 credit card numbers tied into the iTunes Store, giving it massive reach.

We should find out for sure next Tuesday, when the iOS 8 is fully revealed, along with the new iPhones. If Apple does introduce a mobile payment system, it should be a part of iOS 8, rather than an iPhone 6 hardware exclusive. That’s a feature you want to roll out to as many customers as possible, as quickly as possible, rather than using it as an inducement for customers to buy new hardware.

And iOS users tend to be very rapid adopters of new iOS releases. There are over half a billion iPhones out in the wild, the vast majority of which will be upgradable to iOS 8 — and the vast majority of those will be upgraded within months if not weeks from next Tuesday.

THEN AGAIN: A second thought hit me just as I was reaching for the Publish button on this piece. While it would reduce iPay/iWallet/iWhatever’s initial reach by hundreds of millions of phones, it might make sense for Apple to restrict its use to last year’s iPhone 5S and this year’s new models. The reason is that fingerprint scanner built into the home button. It’s not perfect, but it’s better than nothing. Or perhaps iOS 8 would require the use of a numeric code on older iPhones, while allowing payments via fingerprint on newer models.

Would you use feel comfortable using mobile payments from a device without biometric security?