Apple Not Jumping Into Mobile Payment Too Soon

While competitors are jumping into the mobile payment market head first, Apple is showing signs it is not in a rush of releasing its very own payment system. Phil Schiller, head of Apple’s world-wide marketing, said in an interview that while competitors are now starting to battle over “their piece of the pie”, Apple will not be doing it. This has always been like this ever since for the Cupertino-based tech giant.

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It never wishes to be number one in everything. In fact, it also had a late entry into the MP3 Player, Tablet and Smartphone markets. But after years of producing high-quality, well-researched and well-packaged products, it has become the benchmark as far as high-technology electronic products are concerned.

Google Wallet is now being promoted by the search giant by integrating it to its Android OS while giving out small credit amount for first time users. Market research firm Gartner, Inc. predicted that by 2016, mobile payment will exceed $600. This is the reason why Google as well as several other firms in the United States are now rallying to enter the said market…but not Apple.

Microsoft Corp. said last month that it will also be releasing its very own digital-wallet service that will store credit card or other mobile-payment information where funds would be taken from when doing a transaction. Being the software giant, the company couldn’t just neglect a market that would become a necessity for many people in the following years. Aside from that, the Redmond-based company is simply able to develop a better system that would make it easier for customers to pay through mobile devices

Both Google and Microsoft have already conducted their own research about this service and the former has, in fact, started implementing it. The latter is still in the final stages and there are reports that upcoming Windows Phone 8 OS will be showcasing Microsoft Wallet, an NFC-enabled mobile payment system. This is the evidence of the companies’ aggressive pursuit to become the pioneering firms to offer such service.

Factors Affecting Apple’s Decision-Making 

The Wall Street Journal reported that the “deep discussions” of Apple’s executives last year was the start of the company’s “go-slow” approach into the new and unfamiliar market. Last month during the WWDC, the tech giant announced the existence of the Passbook app which is believed to be its foray into the mobile payment market. However, instead of releasing it prematurely, reports suggest that Apple will integrate it into its upcoming iOS 6, although this is unconfirmed for now.

Going slow doesn’t mean to stop. While Passport app may be released later this year, Apple is now in the process of testing the full extent of the market by releasing the Passbook app which stores information of boarding passes, loyalty cards, tickets and the like but not debit or credit cards. Analysts say Apple is just avoiding problems and possible complaints because of bad experiences by merchants. One of the reasons why the company is delaying its full-blown mobile payment service is because it is letting its competitors do more research.

Apple has over 400 million credit card accounts registered in its app store (known as iTunes), according to the report from The Wall Street Journal. This would mean that even if the company hasn’t started its own campaign in the new sector, it already has an upper hand compared to Google and Microsoft. Knowing that its customers will not go anywhere, it could also be one of the factors urging the executives to order a “go-slow” for the mobile payment system. It is, thus, logical that the company is trying to learn everything to avoid more dissatisfied customers by the time the new system becomes operational.

[source: The Wall Street Journal]