Report: Apple prepping its own mobile payments service

With the large number of Apple iPhone and Apple iPad users, along with the large number of credit cards used to mke purchases on iTunes, the Cupertino based tech giant would seem to have everything it would need to put together its own mobile payment network. This would put Apple on a collision course with other names in this industry, all of which have had a tremendous head start on Apple.Take PayPal for instance. The eBay subsidiary is one of a number of companies that include credit card processor Square, that are expected to drive the growth in mobile payments from $12.8 billion in 2012 to $90 billion by 2017, according to Forrester Research.

Apple's iTunes and App Store head Eddy Cue, has met with executives in other industries in an attempt to smooth the path for Apple's incursion into mobile payments. A trio of sources have also revealed that Apple has given online store executive Jennifer Bailey, the job of starting up this new business. 

The mobile payments industry is taking off. Carl Icahn, who has a $3 billion investment in Apple, has been buying eBay stock. Using the same strategies he has been employing to try to get Apple to buy back $150 billion of its stock, the activist investor is demanding that eBay spin off PayPal as an independent company. Icahn has a high regard for PayPal, calling it a "gem".

Apple does allow iDevice users to pay for books, movies, and music from iTunes. Apps and in-app purchases can also be bought through an iTunes account. Inside Apple Stores, some purchases can be made by scanning an item and paying via a credit card tied to an iTunes account. But what you can't do is buy that snazzy suit or those new sneakers by using your iTunes account. Some suggestions include letting buyers fill out a credit card form for a purchase using card information on file at iTunes. Another suggestion is that Apple use its TouchID fingerprint scanner as a form of an electronic signature to lessen the chance of fraud.


If Apple were to make a serious push into this game, it might be able to control the dice pretty quickly. Consider that the company has 575 million registered iTunes users, has sold 375 million iPhones over the last five years, and has rung up 155 million tablets since it launched the iPad in 2010. Apple looked at mobile payments back in 2012, but at the time the company was worried that if a customer had a bad experience with a merchant, the blame could be put on Apple, hurting its reputation.

source: WSJ