September 3, 2014 -
Apple is partnering with credit card companies, financial institutions and retailers to enable iPhone users to make secured mobile payments, according to a report by Bloomberg.
The partnership, which includes Visa, MasterCard and American Express, will be officially announced on September 9, along with details about the new iPhone 6, according to the report which cites an unnamed source familiar with the situation.
The iPhone 6 will enable users to easily make secured mobile payments by including a near-field communication chip embedded in the device, said the source. This development, plus the fingerprint recognition reader Touch ID, which is featured in the current iPhone 5s, will enable users to be able securely purchase goods and services in a retail store with the touch of a finger.
Reports of talks between Apple and Visa regarding the iWallet first surfaced in July.
Transforming the iPhone into a mobile wallet would encourage iPhone users to maintain their loyalty to the Apple brand and its products, as well as generate greater revenue for Apple from its existing 800 million iTunes accounts, which contain billing information.
Up until now, Apple has only used its iTunes accounts in its marketplace. The success of Apple’s mobile wallet could potentially generate new advertising revenue from brands who are looking to target consumers while they are inside a store, Crone Consulting CEO Richard Crone told Bloomberg, who estimated that the mobile wallet application could earn Apple an average of $300 a year per user from advertising.
However, the success of the mobile wallet will mostly depend on the retail industry’s adoption of the platform, which has been skeptical of providing payment information to a third party, said Crone said.