mobilepayNo other company is as closely examined and observed as Apple. With all eyes on each move it takes, there is certainly room for all kinds of rumors and speculation that fuel again news and imagination on new products, offers and technologies. And that for good reasons! Apple has often proven in the past that it is able to turn the business of various industries upside down and shift markets fundamentally.

But is the company still able to meet the industry’s expectations? The transition from Steve Jobs to Tim Cook left its marks with increasing and louder doomsday predictions. Has Apple already had its days? Does the company now enter the mobile payment arena? What will be their offerings and what role will the company play there? Are they planning their sweeping blow or did they already miss the train, as they still haven’t integrated Near Field Communication (NFC) so far? Or is their time coming to an end because of the "Android" strategy of an open eco-system?

Everything seems possible and as always Apple keeps its cards close to its chest. However, there are by now more than clear signals in which direction the company is heading. As in the past, Apple's maneuver in mobile payment will for sure be carefully monitored and supervised, but the time window for its own self-designed mobile payment strategy and approach gradually starts to close.

No competitor in this segment should assume that in 1-2 years there will still be time for placing the chess pieces unhurriedly on the "Next Generation Payment” chessboard, as Apple's first maneuver could then mean “Checkmate"!

The facts speak for themselves: With 600 million iTunes users, Apple’s customer base is 4 times larger than that of PayPal and almost 3.5 times as large as the one of Amazon, with 500,000 customers being gained on a daily basis. Anyway, more than half of all m-commerce spending is done on iOS applications. Developers - and in particular the new mobile POS startups, such as Square, iZettle, Payleven - absolutely love Apple devices and iOS.

Thus, to no surprise, Tim Cook announced just last month the highest turnover in the company's history. According to him, 51 million iPhone 5S were sold that brought in a good profit thanks to a margin on all devices of around 40%, besides the company’s incredible achievement of 90% customer satisfaction and loyalty among iPhones users.

In the fall of 2012, Apple introduced the "Passbook", a "Barcode Payment Container" that can store coupons, tickets and boarding passes, providing developers and brands an easy solution to integrate services via a technical interface. More than 100 brands, such as Lufthansa or British Airways, make use of it and offer to save tickets in the Passbook, as well as many brands that integrate vouchers that way.

Fingerprint sensor: Touch ID-safety is the biggest hurdle for a successful mobile banking and payment system, influencing the frequency of use and acceptability of services on the part of customers and dealers. Besides getting faster access to the device, the fingerprint solution should be used in the future for authentication, as it is essential a prerequisite for a fast, attractive and secure payment process. In Asia and the US biometrics are already more widespread than in Europe, nevertheless the industry is advised to keep an eye on the technology and its suitability for online banking or commerce and to observe the reactions of the regulatory authorities. But despite all concerns, Tim Cook just stated: “Mobile Payment via Touch ID is on its way.”

Bluetooth Low Energy (BLE) and iBeacons: The technology standard BLE has long been integrated into the relevant smartphones and tablets of the leading manufacturers, making it far more widespread than NFC technology. By using iBeacons - introduced in September 2013 - marketing and GPS solutions within stores are made possible to the point of mobile payment in interaction with the touch ID, among other things. In addition, BLE and iBeacons are Apple’s response to the "Internet of Things", which is another big trend that will integrate the mobile use of smartphones and tablets in business in the long term.

Currently, China has 500 million mobile Internet users and the market has off the bat become the largest mobile payment market in the world, making it Apple’s main target for its impressive demand for mobile payment and speed of growth. The Chinese central bank reported recently US$ 1.6 trillion in mobile payment and an increase in transactions by 213%, compared to the previous year, besides a 317% increase in value of transactions.

Last year, Apple has finally signed a contract with China Mobile which is, with its 750 million customers, the world’s largest mobile operator. With its partner NTT Docomo, China Mobile relies on NFC technology and has gained 3 million users within a very short time. In addition, Chinese banks get a collaborative strategy model for a mobile payment platform that is offered in conjunction with China Mobile. Now, the billion-dollar price question is: What will be Apple’s next move?

Due to its successful end device strategies, Apple holds an important cornerstone of the mobile payment value chain - namely customers and dealers. By opting for BLE and iBeacons, quickly deployable mobile payment services with lower eco-system complexity are possible in the short-term. However, the current lack of NFC technology at Apple is still a moot question and the market should therefore only really take off when there are integrated offerings available. For this purpose, Apple has registered numerous patents for mobile payment services in the recent past, including "payments for goods that are initiated by a signal from a smartphone to a wireless receiver" or "a sensor that combines biometric and NFC technology" or "a method and a system that manages credit".

Considering all facts, Apple is actually in the most comfortable position of all players in mobile payment: It has the most options and can still more or less choose what role it wants to play and where it wants to play it in the value chain - be it as hardware supplier (smartphone, readers), trusted service manager, white label platform, or " World Bank". The company has the highest potential of being a game changer because of its financial strength, its outstanding customer base (end user / distributor), its experience with complex innovation problems, impressive history and outlined moves.

At the same time, the company won’t probably dominate the market unilaterally in the future, but will have to respond to market developments in its main target markets - such as China. If the largest mobile payment industries commit themselves to the NFC technology, the company will have to respond and their patents will then usefully come into play.

By Daniela La Marca