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Vikot's river of random thoughts

How could Apple mobile payments change the apps landscape

Viktor Marohnic

Few weeks ago rumors about Apple going deeper into Mobile Payment space broke up. I haven't seen that much of a coverage as I would expect considering that this might be the biggest thing they did in last year or two.

This how your future wallet might look like. Image by Cult of Mac.

This how your future wallet might look like. Image by Cult of Mac.

iTunes currently has 400 million accounts with credit cards attached which makes it the biggest credit card database in the world. One thing after reading about Apple moving into mobile payments is how this could open up huge number of new opportunities for mobile app developers and Small Business apps. I think biggest opportunity is in the small business market. That market was historically hard to crack for any industry and that is true for mobile app developers as well.

Business listings in Square Wallet app

There are two types of apps targeting SMB's:

  1. Apps that are trying to create a network of SMB's and their customers
  2. Branded apps built custom for a individual small business

Some examples of apps in the first group are Square Wallet and American Express Rewards. In both of those apps customers are getting points by paying with Square or Amex. They can use points in the stores and get rewards. Benefits of that approach is that those apps can drive additional foot traffic to your store but there are also two major drawbacks on the SMB side: 

  • SMB's cannot give points for something else than payment. For example Facebook share or for brining in new customer
  • SMB's also do not like the fact that they are listed in a single apps with all other competitors and additionally that their customers that sign up for loyalty are getting offers from nearby businesses




Insert "Pay with app" icon somewhere.

Insert "Pay with app" icon somewhere.

Second group covers apps that are build for a restaurant or a barber shop and are currently used to engage with customers, push content like blog posts, videos, event schedules and other basic business information to their consumers. All that is great but imagine how much more value and engagement those apps would enable customers to pay with their phones. Here is where I see biggest opportunity.

It is not known how exactly Apple will play this. Is this going to be one payment app linked with Passbook, iBeacon and iTunes credit cards or maybe Apple plans to release this as an SDK to developers and let them implement payment for physical goods in their apps. All of the sudden this kind of app could become much more powerful and engaging.




Let's assume that Apple will provide payment SDK for third party developers

This scenario would be possible.

  1. You walk into the restaurant and check-in with into their own branded app.
  2. Waiter gets a message that you are in and you want to use the app for payment.
  3. When you are done with your meal, you just walk out of the restaurant and receive a push notification that your credit card was charged.
  4. Additionally you get some loyalty points for your purchase that you can use next time you get in for a lunch.

No cash, no credit cards. You just walk in and you are done. And the same goes for your favorite barber shop, spa or local store. Something like what Uber does, but no need to enter credit card details, you just download the app and you are all set up.

That is pretty cool and powerful. It takes SMB apps to whole another level and we could see our favorite businesses having apps that we are going to use much more than so far.

What do you think?

But the biggest question remains. What exactly will Apple do in the mobile payments arena? What do you think? Would love to hear your thoughts in the comments.